TD Securities analysts Ryan McKay and Bart Melek report that gold and other precious metals are experiencing heavy selling pressure from Commodity Trading Advisors (CTAs), driven by surging real interest rates and a stronger US Dollar (USD) [1]. Despite this, the analysts highlight ongoing ETF inflows and sustained central bank purchases, particularly by the People's Bank of China (PBoC), which has marked its 23rd consecutive month of gold buying, adding another 23 tonnes in September [1].
The analysts note that while gold is currently under pressure, a strong dip buying impulse is expected due to supportive longer-term drivers and flows. Discretionary traders, ETFs, and central banks are all cited as providing a strong floor for gold prices [1]. The drivers behind these flows include geopolitical risk, fiscal concerns, dollar debasement, de-dollarization, and stagflation concerns, which are expected to sustain persistent demand for gold [1].
Looking forward, TD Securities anticipates that these factors will enable gold to further disconnect from real rates and set the stage for a new bull run into 2027 [1].
CONCLUSION
Despite current selling pressure from CTAs and macro headwinds, TD Securities expects persistent demand from ETFs and central banks to support gold prices. The firm forecasts a potential gold bull run extending into 2027, underpinned by ongoing geopolitical and macroeconomic concerns.