Gold: Dip buying case builds into 2027 – TD Securities

TD Securities’ Ryan McKay and Bart Melek note heavy CTA (Commodity Trading Advisors) selling across Precious Metals, with Gold under pressure from surging real rates and a stronger US Dollar (USD). However, they highlight ongoing ETF inflows and sustained central bank purchases, particularly by the PBoC, as key supports. The authors expect persistent demand driven by geopolitical and macro concerns to underpin a new Gold bull run into 2027.

CTAs sell but structural bids support

"Precious metals come under heavy selling pressure, with CTAs selling gold, silver and platinum. However, we expect a strong dip buying impulse for gold in particular as longer-term drivers and flows remain supportive."

"Expecting strong dip buying in gold. The yellow metal is on the back foot again this morning amid surging real rates and a stronger dollar, but on the flip side ETF accumulation continues and the PBoC reported a 23rd consecutive month of central bank buying, with another 23 tonnes in September."

"A continued bid from discretionary traders, ETFs, and central banks all combine to provide a strong floor for gold."

"Given the drivers of these flows range from geopolitical risk, fiscal concern, dollar debasement, de-dollarization and stagflation concerns, we expect the appetite to be more persistent and ultimately hold firm in the face of surging real rates."

"We continue to see the stage being set for gold to disconnect from real rates further and begin a new bull run into 2027."

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