TD Securities Expects Short-Term Drop and Long-Term Record High for Gold Market
Global financial institution TD Securities projected that following potential short-term declines, gold will reach new record highs in the long term driven by central bank and investor demand.
TD Securities reported that Federal Reserve Chair Kevin Warsh's hawkish messages could create pressure on gold prices in the short term and lead to a retreat toward the lower bound of the range by the end of the year.
Expectation of Short-Term Pressure
TD Securities, the capital markets arm of Canada-based TD Bank, forecasted a short-term pressure period in the gold market following the statements by Fed Chair Kevin Warsh. The institution stated that prices could pull back as expectations for interest rate hikes strengthen.
Impact of Hawkish Messages
The hawkish tone adopted by Warsh in his Jackson Hole speech and his determination to bring inflation down to the 2% target found resonance in the markets. Following these messages, markets priced in a higher probability of interest rate hikes by the Fed at its September and December meetings.
Year-End Price Forecast
Despite the recent weakness in the dollar, gold was evaluated as continuing to face downside risks in the near term. TD Securities estimated that gold could approach the lower bound of the $4,200-$4,700 band by the end of the year.
Long-Term Record Target
Despite short-term risks, the institution maintained its long-term bullish outlook. It was emphasized that central banks, institutional investors, and physical retail demand will continue to be decisive in this process.
2027 Price Forecast
In the analysis shared by TD Securities, it was stated that the forecast for gold to reach $5,350 by the third quarter of 2027, driven by strong demand, remains unchanged.