Banks urge buying gold dips as volatility tests investor confidence

Tuesday 21 April 2026 - 15:20

By: Dakir Madiha

Banks urge buying gold dips as volatility tests investor confidence

HSBC and OCBC are advising investors to use recent price swings in gold to build positions, arguing that structural drivers remain supportive despite heightened volatility. Strategists at both institutions point to a weaker US dollar and persistent fiscal risks as key forces underpinning the precious metal over the medium and long term.

Gold prices have seen sharp fluctuations in 2026, reaching a record of 5,415 dollars per ounce in late January before falling करीब 20 percent to below 4,400 dollars by the end of March. The drop was followed by a partial recovery, with prices rebounding to around 4,800 dollars by mid-April. Analysts at HSBC maintain a constructive outlook, while OCBC recommends a disciplined approach focused on buying during pullbacks rather than chasing upward momentum.

The volatility has been closely tied to geopolitical developments in the Middle East. Escalation involving Iran triggered large scale liquidations as investors sold gold to raise cash, while the US dollar absorbed much of the demand for safe haven assets. Rising oil prices and higher bond yields further weakened gold’s traditional hedging role during parts of the crisis. A subsequent ceasefire supported a rebound, though price movements remain sensitive to shifts in risk sentiment.

OCBC noted that recent geopolitical updates again influenced market behavior, with gold briefly climbing toward 4,889 dollars following early signals related to the Strait of Hormuz before retreating. The bank identified resistance levels around 4,850 to 4,900 dollars and support between 4,650 and 4,714 dollars, indicating a trading range shaped by short term uncertainty.

Both banks emphasize that long term fundamentals remain intact. HSBC highlighted risks of stagflation, expanding fiscal deficits, and continued diversification by central banks away from the US dollar. Estimates place US public debt close to 100 percent of gross domestic product, reinforcing demand for alternative stores of value. The bank expects interest rates from the Federal Reserve to remain stable into 2026 and 2027, a factor that may cap short term gains but does not undermine the broader bullish case.

OCBC also described the current environment as a structural shift, with safe haven demand gradually re emerging as the dollar weakens. The bank has raised its year end price target to 5,600 dollars per ounce and expects an average of 5,055 dollars in the fourth quarter. This outlook reflects confidence that underlying demand drivers will continue to support prices despite interim fluctuations.

In the near term, however, both institutions caution that gold’s direction depends on several unresolved factors. The durability of the Middle East ceasefire, the full reopening of key energy routes, and the trajectory of interest rates will all play decisive roles. A more hawkish stance from the Federal Reserve, leading to higher real yields, remains the main risk to the bullish scenario outlined by analysts.