TDS: gold prices hold support, investors ‘have reason to return’

TDS: gold prices hold support, investors ‘have reason to return’

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 Gold has bounced after nearing chart support and the combination of stimulus measures and inflation expectations “suggest investors will have reason to return” to the market, said TD Securities.

The metal Wednesday traded to the lower end of its recent trading range, with spot metal briefly dipping below $1,700 an ounce, but gold nevertheless held support, TDS said.

“We continue to expect a range-bound market in the near term as risk appetite continues to firm and as open interest and liquidity remain relatively low,” TDS said. “With that said, range-bound trading could dampen momentum signals, but the strong price action this morning amid a risk-off tone has lessened the risk as the trigger for CTA [Commodity Trading Adviser] selling moves further away, now sitting at $1,672/oz.

Moving forward, still strong ETF [exchange-traded-fund] holdings along with the prospect of deeper negative real rates, amid improving inflation expectations and mass amounts of monetary and fiscal support, suggest investors will have reason to return to the yellow metal.”

As of 9:23 a.m. EDT, spot gold was $14.30 higher for the day to $1,715.10 an ounce.

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