Gold Forecast from TD Securities: Short-Term Decline, Long-Term Expectation of $5,350

TD Securities announced that gold prices may experience downward pressure in the short term, in line with Federal Reserve Chairman Kevin Warsh's hawkish messages and rate hike expectations. Although the institution forecasts a pullback by the end of the year, it maintains its positive long-term outlook and predicts that the $5,350 level will be reached in the third quarter of 2027.

Short-Term Decline Expectation

TD Securities evaluated that Federal Reserve Chairman Kevin Warsh's hawkish messages at the Jackson Hole meeting could increase short-term pressure on gold prices. The institution projects that if expectations for rate hikes strengthen, gold could pull back to the lower limit of the $4,200-$4,700 band by the end of the year.

It was stated that the recent weakness in the dollar would not be sufficient on its own to offset the pressure created by expectations of a tighter monetary policy by the Fed, and that gold could face downside risks in the near term.

Kevin Warsh's Hawkish Messages

In his Jackson Hole speech, Kevin Warsh demonstrated his determination to bring inflation down to the 2 percent target, while emphasizing that current financial conditions are not sufficiently restrictive.

Following these messages, markets began pricing in the possibility that the Fed could raise interest rates at its September and December meetings, while rising interest rates and the dollar pulled gold down to around $4,450.

Long-Term Target of $5,350

Despite Warsh's statements, TD Securities did not change its medium- and long-term positive outlook, reiterating its forecast that gold could reach $5,350 by the third quarter of 2027.

It was stated that demand from central banks, institutional investors, and physical retail investors would continue to be the main drivers of this rise.