TDS: 'gold positioning is becoming stickier' and price dips 'shallower'
Any gold-price dips are “becoming shallower” as investors keep buying the yellow metal, with global interest rates continuing to fall amid the global coronavirus outbreak, said TD Securities in a research note. The Bank of England delivered an emergency 50-basis-point cut Wednesday after other central banks have cut in the last couple of weeks, including Canada, the U.S. and Australia. Further, TDS pointed out that Italy will spend some 25 billion euros to combat the virus. “We note gold positioning is becoming stickier at higher and higher levels, while any dips are becoming shallower as the markets' appetite for safe assets amid virus fears and real rate suppression keep investors running to gold's warm embrace,” TDS said. “The continued downward pressure on interest rates and the USD [U.S. dollar], and the asymmetric nature of central-bank reaction functions, continue to offer fundamental backing for the yellow metal, as noted by record ETF [exchange-traded-fund] holdings.”