According to TD Securities’ commodity strategists, Commodity Trading Advisors (CTAs) have recently reversed their buying activity in gold, leading to some selling pressure in the market. However, the strategists emphasize that discretionary investors continue to provide strong support for gold, helping the metal remain resilient even after a hawkish interest rate hike by the Federal Open Market Committee (FOMC) [1].
The report notes that while CTA buying in gold was quickly unwound, the yellow metal has demonstrated significant strength following the FOMC's decision. The strategists highlight that the broader precious metals environment remains favorable, with an easing of energy prices also contributing to immediate-term support for gold [1].
TD Securities anticipates that any near-term weakness in the precious metals market will likely be limited to modest CTA selling. They further suggest that such weakness would increasingly be viewed as a buying opportunity for gold, given the ongoing discretionary investment appetite and supportive market conditions [1].
CONCLUSION
TD Securities sees gold as well-supported despite recent CTA selling, attributing resilience to discretionary investors and a favorable market backdrop. Any short-term weakness is expected to be limited and could present renewed buying opportunities for gold.