According to TD Securities strategist Bart Melek, gold's recent decline is attributed to the Iran-driven oil shock, higher inflation expectations, and a firmer US Dollar, all of which are contributing to a tighter Federal Reserve policy stance for a longer period [1]. Melek identifies strong long-term support for gold in the $4,288–$4,000 per ounce range, suggesting that an oil price spike to $150 or more per barrel could push gold down to this support level, as the Fed would likely maintain a relatively restrictive policy in such a scenario [1].
Despite current pressures, Melek projects that once the Iran conflict and oil-related inflation pressures subside, gold could resume its upward trend, potentially reaching $5,200 or higher by late 2026 [1]. He notes that a future pivot by the Fed toward its maximum employment mandate, lower yields, a softer US Dollar, and renewed investor and central-bank demand could reignite the bull trend in gold after a possible test of the $4,288–$4,000 support zone [1].
Melek further states that the eventual easing of economic and fund-flow headwinds associated with the Iran war will serve as an upside catalyst for gold. Additionally, lower inflation expectations and a shift in Fed policy to address economic damage from the current negative supply shock in energy and other key commodities are expected to help gold reach new record highs [1].
CONCLUSION
TD Securities anticipates that gold's current weakness is temporary, with strong support identified around $4,288–$4,000 per ounce. The firm projects a significant upside for gold, targeting $5,200 or more by late 2026 as macroeconomic and geopolitical pressures ease.