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Gold is experiencing further liquidity selling, which is seeing the yellow metal perform poorly in line with risk markets, but persistent investment demand continues to offer support, as strategists at TD Securities note.

Key quotes

“The continued downward pressure on interest rates and the USD, and the asymmetric nature of central bank reaction functions, offer fundamental backing for the yellow metal throughout 2020 and suggests any dips toward the $1600/oz level or lower would represent ideal buying opportunities.”

“While these short term runs to liquidity remain a risk in the near term, we note that positioning is becoming stickier at higher levels and the 2020 uptrend remains intact.”

“Gold remains the standout of the precious metal complex, and we expect the yellow metal will continue to outperform the other precious metals with industrial exposure and lower betas to monetary policy and safe-haven flows.”


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