Gold: Positioning for $1,322 sooner-than-anticipated - TDS

TD Securities analysts note that the gold prices have broken the $1,300/oz recently as also ample risk appetite and a firm USD prompted specs to aggressively cut their net exposure last week.

Key Quotes

“As such, with the USD range-bound, equities showing less strength and the with the market firmly believing anticipating that the upcoming FOMC minutes will cite chatter surrounding rate cuts, which would confirm Fed dovishness, the yellow metal has more upside.”

“News that China's PBoC bought gold for the fourth consecutive month in March may also serve as an additional set of factors helping to lift prices. We would not be surprised to see the yellow metal move toward the low $1,320/oz range in the not too distant future.”

“We suspect that there is the potential for aggressive CTA buying at with prices level north of $1,290/oz1, which could help support see a sharp rally given recent long liquidations and increases in short positioning.”

“Longer-term, we continue to be comfortable with our long gold trade which we entered when the yellow metal was $1,298/oz, with a three-month target of $1,360/oz, before a move toward $1,400/oz next year.”