Gold: Debasement narrative lifts prices – TD Securities

TD Securities’ Bart Melek notes that Gold has rallied sharply as recent U.S. Dollar weakness and concerns over Fed credibility and Treasury bond-market intervention drive fresh long positioning. Worries about America’s fiscal situation are reviving the USD debasement trade and may continue to support Gold, although a move toward TD Securities’ $5,350/oz target is still considered premature.

Fresh longs chase debasement trade

"Traders added to gold exposure as the recent U.S. Dollar weakness, Fed Credibility and Treasury Bond Intervention concerns come into focus."

"Worries about America's fiscal situation are once again resurrecting the USD debasement narrative, which, in turn, is energizing gold bugs."

"Based on Treasury Dept statements, market participants believe the government bond market interference may get even more aggressive. At this stage, gold may continue to respond to the weaker USD."

"A move to our $5,350/oz target is a little premature for now."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)