Gold Prices Forecast to Remain Range-Bound Amid Higher Interest Rate Risks

TD Securities is warning that gold prices will likely remain range-bound due to the ongoing risk of higher interest rates. According to the firm's analysis, the precious metal may struggle to break out of its current trading band until clearer signals emerge on the Federal Reserve's monetary policy path.

The opportunity cost of holding non-yielding assets like gold increases with higher interest rates, making it less attractive to investors. With the Fed maintaining a hawkish stance in its fight against inflation, the prospect of sustained elevated rates continues to weigh on gold's appeal. As of mid-2025, the Fed has kept its benchmark rate in a range of 5.25%, 5.50%, and market expectations for near-term cuts have been repeatedly pushed back.

Gold has shown resilience in recent months, supported by central bank buying and geopolitical uncertainty, but it has failed to sustain rallies above key resistance levels. Spot gold has traded in a broad range of roughly $2,300 to $2,450 per ounce since April 2025, reflecting the tug-of-war between rate concerns and safe-haven demand.