Gold prices going into $1,800s as trading regime shifts to inflation-hedge product - TD Securities
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(Kitco News) Gold prices are on their way to $1,800s, according to TD Securities. “A herd of gold bulls is making its way. Real rates continue to print new post-Covid shock lows, despite a lull in long-term inflation expectations, as long-end yields grind lower. This contrasts with recent price action, which has been led by rising long-term inflation expectations as a powerful driver of gold prices,” write TD Securities strategists. There has been a shift in gold’s trading regime from a safe-haven asset to an inflation-hedge product, the strategists add. “Looking forward, we also see substantial room for this driver to run, as the entire maturity spectrum of inflation breakevens are still priced below policy objectives. In this context, declining real rates should imminently support gold prices into the $1,800s,” they say.