Gold Prices Hold Firm Amid Fed Pause

The gold market is experiencing sustained demand due to the Federal Reserve's pause in interest rate hikes. According to TD Securities, systematic buying continues to support prices as investors maintain a net long position in gold.

TD Securities notes that the current monetary policy stance and resilient economic data attract systematic trend-following flows into gold. Systematic demand refers to buying driven by algorithmic models reacting to price trends, volatility, and macroeconomic data.

The Fed's pause has reduced the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors. The central bank's cautious approach to future rate hikes also keeps real yields in check, a key driver for gold prices.

As of mid-2025, the Fed funds rate remains in the 5.25%-5.50% range, with market expectations leaning toward a cut later this year. This dynamic has kept systematic buyers engaged, offsetting weakness in physical demand from some regions.