Gold Bulls Gain Strength on Discretionary Demand
Gold prices are being supported by strong discretionary and Asian buying, according to TD Securities strategists Ryan McKay and Bart Melek. While Commodity Trading Advisors (CTAs) positioning has plateaued, they argue that CTAs would likely add length only if gold reaches $4,600/oz.
The analysts point out that softer US jobs data and subdued energy prices could reinforce a stagflation narrative that benefits gold. They also mention that Chair Warsh staying on hold could further strengthen this narrative.
Asian appetite for gold remains strong, with broad-based buying across cohorts on the Shanghai Futures Exchange (SHFE) and continued ETF inflows. This discretionary demand is keeping bulls in control of the market, despite CTAs not adding length yet.