Gold Prices Hold Firm Despite Hawkish Fed Tone

TD Securities' Ryan McKay and Bart Melek have observed that positioning in Gold remains resilient despite Federal Reserve Chair Jerome Powell's hawkish tone at Jackson Hole. Despite this, they believe that the recent rally may be premature due to ongoing inflation concerns and renewed hike pricing for 2027.

The recent Jackson Hole speech by Fed Chair Warsh acknowledged the inflation concerns, which has led to a more hawkish stance from the Federal Reserve. As expected, this has tempered the precious metals complex, but gold prices have remained well-supported.

Moving forward, TD Securities does not anticipate material downside for Gold as they believe that the landscape for precious metals has improved amid dollar debasement and uncertain Fed hikes.