According to TD Securities analysts Ryan McKay and Bart Melek, gold and broader precious metals are currently trading in a higher range, which could prompt another round of Commodity Trading Advisors (CTA) buying in the near term [1]. Their scenario analysis indicates upside asymmetry for gold into next week, with support stemming from Treasury efforts at the long end of the yield curve and a Federal Reserve that appears willing to overlook higher energy prices [1].
The analysts note that precious metal pricing is approaching new CTA buying triggers, and their simulations highlight notable upside asymmetry across gold, silver, and platinum for the coming week [1]. While recent trading flows have slowed and interest rates have raised questions about the Treasury's liquidity plans, gold and precious metals are expected to remain comfortable within this elevated range [1].
Additional support for gold comes from strong buying activity by top SHFE (Shanghai Futures Exchange) traders and a recovery in Chinese ETF inflows after a brief period of outflows [1]. However, the market's continued pricing of rate hikes for 2027 leads TD Securities to maintain a cautious stance regarding the next significant move higher in gold, suggesting that broader market conviction in a Federal Reserve pause may be necessary for further gains [1].
Overall, the analysis points to prices being near new buying triggers, with the potential for CTA-driven upside in a flat to upward price environment through next week [1].
CONCLUSION
TD Securities highlights the potential for further upside in gold prices, driven by CTA buying triggers and supportive Treasury and Fed signals. However, caution remains due to ongoing market expectations for future rate hikes. The outlook for gold is positive but contingent on broader market conviction regarding Federal Reserve policy.