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Demand for safe-haven assets and central bankers lowering real rates around the world are set to have a positive gold influence, according to strategists at TD Securities.

Key quotes

“The yellow metal is hovering north of $1550/oz support, as the rush of safe-haven buying reverses and pressures prices lower. We expect that the structural growth in investment demand for the yellow metal will keep prices from a prolonged pullback.” 

“The world is scarce of safe assets, but capital is seeking protection from negative real rates. Further, we expect central bankers to continue suppressing real rates across the globe, which should keep this theme prevalent”

“In the near-term, we could expect some liquidations from the record stockpile of ETF holdings and extended positioning, but we reiterate that dry-powder analysis suggests that the risk of a rush-to-the-exits is limited given position sizes per trader are not extreme.”