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'There goes $1,800' - TD Securities

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(Kitco News) Gold prices have finally hit and breached that $1,800 an ounce level Tuesday and early Wednesday. And despite some profit-taking nudging prices lower, macro drivers still support the $1,800s level for gold, according to TD Securities. “There goes $1,800/oz. As equities posted their best quarter in more than two decades, the risk-on has helped drive a bear steepening which has halted the slump in real rates, but our rates strategy team continue to think that any significant rise in rates will be eagerly bought by accounts starved for yield,” write the bank’s commodity strategists. “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 $1800s.” The biggest risk on the radar is Director of the National Institute for Allergy and Infectious Diseases Dr. Anthony Fauci’s warning that the U.S. could see 100,000 new cases a day without a change in people’s behavior. Long-term, TD Securities sees gold growing in popularity. “The world-war era fiscal and central bank stimulus, the change in the central bank template that will incorporate 'symmetric inflation targets' and unwinding globalization, also suggest that inflation-hedge assets may grow in popularity,” the strategists note.


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