TD Securities expects gold to remain solid in the third quarter of the year.
Sales due to positive macro data should only be temporary for gold, because higher precious metal prices and a stronger economy could coexist, analysts say. “The spot price of gold fell below USD 1,770 / ounce immediately after the much stronger than expected US job market numbers for June (+4.8 million [new jobs]). The very strong positive reaction of the stock markets to the employment data should at least initially be more capital at the expense of gold in risky assets. There is a fear phenomenon of missing something that increases risk appetite. “
The USD will weaken probably
However, it is expected that the USD will weaken and real interest rates should fall if inflation expectations continue to rise. There are also some long-term aftermath of the COVID 19 pandemic that should support gold this year and next.”
Despite strong employment data, wages are lower, labor force participation is near lows, and the economy will remain below opportunities for some time, which will require massive debt-financed fiscal stimulus and low key interest rates in the foreseeable future, so we stand behind ours positive gold rating and continue to expect the yellow metal to trend toward $ 2,000 an ounce by the end of 2021, “said TDS.