Gold's Pullback Likely Ended as Real Rates Peak

BCA Research, a Canadian research firm, believes that gold's recent pullback has likely ended. According to Roukaya Ibrahim, chief commodities strategist at BCA Research, investors should pay less attention to inflation and more to the trajectory of real yields.

The firm argues that real interest rates have probably reached their peak and that the U.S. dollar will eventually shift from a drag to a support for bullion. This view is based on the expectation that the worst of the real-rate headwind for gold is likely behind it, with U.S. real rates expected to stay broadly steady in the coming months.

BCA Research advises investors to begin buying gold, with a protective stop-loss set at $3,900 per ounce. The firm believes that gold has returned to trading mainly as a macro asset, after several years in which central bank buying dominated traditional market drivers.