If you have caught our last few Bulletins, you’ll know that there is a huge opportunity to buy happening right now. Those who haven’t already taken swift action to buy the dip should do so as soon as possible as this window of opportunity will soon close. The Canadian investment bank TD Securities yesterday said that it fully expects the yellow metal to bounce back – meaning you’ll need to buy now to cash in on the lower prices.
The bank’s head of commodity strategy says that gold will recover from its dip thanks to long term monetary policy expectations, making the current pricing nothing more than a fleeting window.
He said, “Just as gold rebounded over £145/oz ($200/oz) from the late-March lows to trade in the £1,380/oz ($1,900/oz) territory during early-June and market chatter turned bullish again, there was a significant Federal Reserve-driven reversal. As the yellow metal plunged back into the £1,286/oz ($1,770s/oz) range in the days immediately after the June FOMC economic projections were released, the market delivered a sobering reminder to investors and analysts that the path to new highs is almost never a smooth one.
“Despite the recent selloff, we judge that the Fed’s continued emphasis on its full employment mandate should see gold recover most of its recent losses. The relatively new flexible average inflation targeting policy framework and the implied willingness to overshoot inflation targets for a period, should the output gap remain wide, are just a few reasons why very easy monetary conditions are likely to persist well into 2023.”
Melek says that actions of the U.S central bank will also continue to support price increases in the long term. He notes, “The U.S. central bank should keep real interest rate environment highly accommodative across the yield curve for a prolonged period, which is gold and precious metal complex supportive.”