FX.co ★ XAU/USD (GOLD)

XAU/USD Ryan McKay of TD Securities contends that despite additional Fed hikes, gold is entering a new bullish phase with speculative, ETF, and central bank flows bolstering resilience. The bank believes that a resurgent bull run would be supported by increased investor and official sector appetite, de-dollarization, and Chinese demand, with Spot Gold possibly continuing to rise over $5,000/oz into 2027. Upside is supported by flows and macro drivers. The next step upward in gold is almost here. Gold has proven to be resilient in the face of Fed hikes, and with investor and central bank demand increasing once more, the yellow metal appears ready for a new run at levels above $5,000/oz through 2027. The next leg is higher for gold. The gold market has changed, and in recent months, flows from different investor groups with a longer time horizon have intensified. These flows, in our opinion, will enable the yellow metal to endure a policy of rising interest rates and initiate a new bull run to above $5,000/oz into 2027. We believe that any failure to reach this high benchmark will merely hasten the rise for the yellow metal, since three more Fed hikes have already been priced in. This implies that when the outlook for precious metals improves, investors still have plenty of room to accumulate further length. As systematic funds liquidated their modest long positions ahead of the September FOMC, CTA flows have been net-negative in recent weeks, impacting the late summer rise. The posture of momentum funds is currently reasonably clear, and if discretionary flows can rekindle the gold surge as we anticipate, they may potentially provide an additional upside push.