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Gold rebounds after FOMC leaves rates unchanged, TD Securities says

TD Securities notes that entrenched CTA short positions may require gold to push above $4,200 per ounce for even minimal covering, with $4,300 needed for more notable net longs.

Reported · Written up by our desk · Precious Metals

Gold has rebounded following the Federal Open Market Committee decision to keep rates unchanged, according to TD Securities strategists cited by FXStreet. They said the FOMC left rates on hold and signaled tolerance for an inflation shock.

The strategists also argued that the market’s shift in hike expectations, moving them from September to December, does not materially change the outlook for gold. They said “hike pricing” pushed out a few months has little impact on the prevailing view for the yellow metal.

TD Securities pointed to positioning as a key factor, noting that entrenched CTA short positions would require gold to rise above $4,200 per ounce for minimal covering. They added that a move to $4,300 per ounce would be needed for more notable net longs.

FXStreet said gold was trading just above $4,100 per ounce amid a US dollar sell off, and it referenced US Q2 GDP data that came in below expectations as part of the broader move in rates and the dollar. The preliminary estimate showed US Q2 GDP growing at a 1.5% annual rate, compared with 2.1% expected.

Latest closeGold $4,134.80 ▲2.4%

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