Fed Pause Boosts Systematic Demand for Gold
Gold prices have remained stable due to systematic buying as the Federal Reserve pauses interest rate hikes. According to TD Securities, the firm notes that the current monetary policy stance and resilient economic data continue to attract systematic trend-following flows into the precious metal.
The Fed's pause reduces the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors. Systematic funds, which follow algorithmic trading signals, have maintained a net long position in gold, reflecting the supportive macro backdrop.
While the central bank has not ruled out further tightening, the bar for a hike appears higher, especially as inflation shows signs of cooling. This dynamic has kept real yields in check, a key driver for gold.