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Canadian bank, TD Securities says that fears over inflation due to the expansive economic stimulus packages pumped into the COVID-19 ravaged economy strongly support higher gold prices – which is good news longer term for the precious metal.

In a briefing note, TD Securities strategists advised, “A herd of gold bulls is making its way. Real rates continue to print new post-Covid shock lows, despite a lull in long-term inflation expectations, as long-end yields grind lower. This contrasts with recent price action, which has been led by rising long-term inflation expectations as a powerful driver of gold prices. Looking forward, we also see substantial room for this driver to run, as the entire maturity spectrum of inflation breakevens are still priced below policy objectives. In this context, declining real rates should imminently support gold prices into the $1,800s (£1450).”

We have already seen the beginnings of this with the sharp price increase noted this week – and more is on the way. Buy now to capitalise on that surge.

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