According to TD Securities strategists Ryan McKay and Bart Melek, Commodity Trading Advisors (CTAs) are actively covering their short positions in gold, with positioning rising by approximately 7% of the maximum historical size [1]. This shift in CTA behavior is occurring alongside renewed inflows into Chinese gold ETFs following the holiday period, as well as continued global ETF demand for gold [1].
The strategists highlight that the current environment is characterized by persistent geopolitical risks, fiscal concerns, dollar debasement, de-dollarization, and stagflation fears, all of which are cited as major supportive factors driving flows into gold [1]. They note that these strong fundamental backdrops are insulating the precious metals market and contributing to the renewed bullish momentum in gold [1].
TD Securities further argues that the stage is being set for gold to potentially disconnect from real rates and begin a new bull run into 2027, suggesting a positive outlook for the yellow metal in the coming years [1].
CONCLUSION
TD Securities sees renewed bullish momentum in gold, driven by CTA short covering and robust ETF inflows. Persistent macroeconomic and geopolitical risks are supporting the market, with strategists forecasting the potential for a gold bull run extending into 2027.