Gold Rally Supported by Discretionary and Asian Buying

According to TD Securities strategists Ryan McKay and Bart Melek, strong discretionary and Asian buying is supporting Gold prices. This demand has been sufficient to maintain an upward trend in gold, despite Commodity Trading Advisors (CTAs) positioning plateauing.

The analysts argue that CTAs would likely add length only if gold moves towards $4,600/oz, highlighting the bar set for additional buying from this group. In contrast, discretionary and Asian appetite will need to continue their strong buying trends to keep the rally alive.

Asian demand remains robust, with broad-based buying across cohorts on the Shanghai Futures Exchange (SHFE) and continued exchange-traded fund (ETF) inflows supporting gold prices.

The weaker-than-expected US jobs report is expected to ease Fed pricing pressures, particularly with energy prices remaining subdued. This shift could strengthen the stagflation narrative, adding fuel to the gold bulls.