Gold prices sank below the psychological level of $2,000. It remains unclear what route the yellow metal will follow from now on. Analysts and strategists share their forecasts for gold’s course.
TDS opens long position on the expectation that gold will rise!
TD Securities says sales in the gold market are almost over. He also notes that prices will continue to move towards all-time highs from now on. Accordingly, it started a new long gold transaction with a target of $2,150 from $1,994. Daniel Ghali, senior commodity strategist at TD Securities, explains:
We opened an active gold long position at $1,994, anticipating that precious metals will sell out soon and the increased discretionary interest will support the yellow metal towards all-time highs.
The sale of precious metals is near!
cryptocoin.com As you follow, gold fell after testing record levels two weeks ago. Ghali noted on Tuesday that:
Our positioning analyzes argue that with the exception of margin calls associated with a debt ceiling disaster, sell-out in precious metals may be imminent. Underneath, the bar is raised for algorithmic liquidations to suppress prices. In this environment, the Shanghai trader position is approaching year lows. Also, the dry powder analysis highlights that position sizing for gold bulls remains near average levels. This indicates less pain associated with the recent withdrawal.
Gold prices will see the peak in the coming months!
Evidence suggests that gold bulls still have some trading flow to invest and push prices up. From this point of view, Ghali makes the following assessment:
Given the strong historical links with market expectations that the Fed’s rate cut cycle will deepen next year, we expect discretionary capital to flow below. Gold prices could be near all-time highs. But the positioning pattern remains inconsistent with a cycle peak.
The new peak that TD Securities is waiting for is $2,150, which it thinks will reach gold towards the end of the year. “As we expect markets to price a deeper cycle of cutbacks over the next 12 months, discretionary traders could play a big role in helping gold prices solidify,” Ghali said. We expect gold to see new cycle highs in the coming months.”
For gold prices, TDS expects $2,150, but…
Bart Melek, head of global commodities strategy at TD Securities, said last week that gold has suffered from a widening gap between market expectations and the Fed’s dot chart. The Fed signaled a pause in June. Also, a conflicting narrative is developing among some Fed officials still being hawkish. Melek says that Fed rate hike expectations will likely remain uncertain until the new Fed dot chart is announced at the June meeting. In this context, the strategist points to the following levels:
There is strong support near $1,965. We’re still expecting $2,150. However, this support will not continue until later in the year, when it is certain that the Fed will ease.
Critical levels for gold prices
Gold still stalls. However, Credit Suisse strategists remain hopeful for a final move to new record highs above $2,070/75. Strategists expect the record highs of $2,070/2,075 recorded in 2020 and 2022 to remain a formidable barrier to further horizontal consolidation for now. In this regard, strategists make the following statement:
We believe that, after the current phase of change, the market will eventually move to new record levels supported by lower US Real Yields. With that in mind, there will be a significant break above $2,075 on a weekly close basis. Also, a move towards our initial key upside target of $2,330/2360 will clear the way. Support stands at $1,969/66, which includes the 55-DMA. Below this, it signals a more decisive rejection of the $2,075/70 highs.
