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Short-term noise is reinforcing $1,800 as strong resistance level for gold -- TD Securities

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(Kitco News) The short-term noise in the marketplace is reinforcing the $1,800 level as a fairly strong resistance point for gold, but it is only a temporary phenomenon, writes TD Securities. "Gold continues to trade on the cusp of a breakout above the $1,800/oz level, but has failed to do so just yet. With a slight risk-off tone to start the morning, and with the increase in inflation expectations pausing in line with risk appetite, the level has proved to offer fairly strong resistance,” the bank’s commodity strategists say. “But, despite the short term noise, we believe gold is the midst of a regime shift, transitioning from trading as a safe-haven asset to an inflation-hedge product.” Rising inflation expectations in the longer term will help push gold prices well into the $1,800 territory, the strategists add. “Long-term inflation expectations are rising in sync with risk-on behavior, while rates-vol remains deeply constrained amid uber-supportive policy, fueling a process that weighs on real yields. With 10y breakevens continuing to print new post-Covid highs, the normalization in inflation expectations may remain a powerful driver lifting gold prices deeper into $1,800/oz territory.”

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