Gold Prices Nears Key CTA Sell Thresholds Amid Hawkish Fed Tone

The upcoming US Non-farm Payrolls (NFP) data and a renewed hawkish tone from the Federal Reserve are critical for Gold prices, which have recently reached CTA selling thresholds around $4,300/oz.

According to TD Securities' Ryan McKay and Bart Melek, economic data is increasingly important for precious metals, with gold at risk of CTA selling. They highlight that Non-farm payrolls this Friday will be the next piece of data with keen interest for precious metals given the renewed hawkish tone from the Fed and the latest escalation in the energy market.

The analysts' simulations show further declines toward $4,200-$4,100/oz could push CTA positioning close to flat. However, they see limited material downside longer term as the precious metals backdrop improves amid a renewed dollar debasement theme, while Fed hikes remain far from certain.