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Gold stays supported by central demand despite pressure from Fed bets
TD Securities says CTA selling risk could emerge only if gold breaks specified downside levels, while ETF inflows and longer term dollar-debasement themes remain supportive.
Gold is outperforming other precious metals, even as higher energy prices and rising expectations for Fed rate hikes weigh on the broader complex, according to TD Securities’ Ryan McKay and Bart Melek.
They noted that Commodity Trading Advisors could turn into sellers if gold falls through specific downside levels, but argued the metal still has a strong longer term support base tied to central bank demand and ETF inflows.
TD Securities pointed to “dollar-debasement” themes as another reason investors may continue to find support in gold over time, despite near term volatility.
The analysis also comes as gold has shown erratic trading recently, slipping back below the key $4,400 level per troy ounce after a stronger US dollar and a rebound in US Treasury yields across the curve, following US Producer Prices.
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