Gold Hinges on Inflation Data as TD Securities Sees Hawkish Shock Delaying Next Leg Higher

TD Securities' Ryan McKay and Bart Melek believe that gold and other precious metals have managed to hold their ground despite the recent increase in near-term Federal Reserve hike probabilities.

This resilience is attributed to various structural supports, including dollar-debasement themes, central bank buying, and ETF demand. However, the analysts caution that upcoming US inflation data will be a crucial catalyst for Fed pricing and discretionary flows.

A stronger-than-expected inflation print could embolden Fed pricing, potentially weighing on gold. Conversely, less worrisome inflation data may ultimately spark the next wave of discretionary positioning in the market.