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Gold price consolidation could last for months, deeper pullbacks not ruled out: TD Securities

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(Kitco News) Gold could see months of consolidation before resuming its uptrend, according to TD Securities. “The yellow metal is challenging the pandemic-era uptrend that has supported prices since March … Following a period of extreme momentum, forward returns tend to be skewed negatively with sharp drawdowns and limited upside, suggesting a consolidation period could last for months and that we could see a deeper pullback,” write TD Securities strategists. Unless gold prices see a strong recovery this week, more pain could be in the cards, the strategists note. “Should gold prices fail to hold the pandemic-regime uptrend, we could well see a more substantial positioning squeeze.” However, the long-tern outlook remains a positive one for gold. “We expect that the prevailing macro tailwinds will continue to suppress real rates via financial suppression, suggesting that capital will continue to seek shelter in precious metals,” the strategists write. This means that the current price weakness could be a good buying opportunity.

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