Gold: Pullback before potential $5,200 breakout – TD Securities

TD Securities strategist Bart Melek argues that Gold’s recent decline reflects the Iran-driven Oil shock, higher inflation expectations and a firmer US Dollar, which are keeping Fed policy tighter for longer. He sees strong long-term support around $4,288–$4,000/oz and projects that once the Iran conflict and Oil-related inflation pressures fade, Gold could resume its bull trend toward $5,200+ by late 2026.

Gold pressured now, upside later

"Gold’s pullback is very much driven by the Iran-related oil shock, higher inflation expectations, and a potential elevated interest rate environment. Higher crude prices, firmer USD and expectations for tighter policy have pushed gold lower despite elevated geopolitical risk."

"There is a path to $5,200+ once the conflict and oil-driven inflation pressures fade. A later pivot toward the Fed’s maximum employment mandate, lower yields and a softer USD, plus renewed investor and central-bank demand, could reignite the bull trend after a potential test of $4,288–$4,000/oz long-term support."

"Based on technicals and the long-term trend line, there is strong long term support in the $4,288-4,000/oz range. An oil spike to $150+/bbl could well get the yellow metal down to this level, as this assumes the Fed would want to tilt toward a relatively restrictive stance."

"The eventual easing of economic and fund-flow headwinds associated with the Iran war will provide an upside catalyst for gold. Meanwhile, lower inflation expectations, and a Fed policy tilt back toward its maximum employment mandate—aimed at reversing the economic damage caused by the current negative supply shock in energy and other key commodities—should also act as further catalysts helping the yellow metal reach new record highs."

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