Gold Enters New Bull Phase Amid Central Bank Buying
TD Securities believes gold is entering a new bull phase due to supportive factors such as speculative positioning, ETF flows, and central bank demand. Despite potential further US rate rises, the bank sees resilience in gold during Federal Reserve tightening, alongside de-dollarization themes and increased Chinese buying.
TD Securities points out that three additional Fed hikes are already priced in, implying that any shortfall from this path could boost gold prices. Additionally, there remains scope for market participants to add length, while systematic funds have recently cut modest longs ahead of the September FOMC.
The bank expects discretionary buying to re-energize the rally and sees central bank accumulation continuing through 2027, with spot gold potentially breaking above $5,000 an ounce. TD Securities recommends that derivative traders position for a major gold breakout by utilizing long call options or bull call spreads.