TD Securities has slashed its gold price forecasts for the next six months as elevated inflation expectations driven by supply shocks continue to strengthen US Treasury yields and support the dollar. The revision comes as markets now price in a possible Federal Reserve rate hike as far out as late 2026, creating near-term headwinds for the precious metal.
Gold typically struggles when real yields rise and the dollar strengthens, as higher returns on interest-bearing assets reduce bullion’s appeal. The supply-shock inflation narrative is keeping monetary policy expectations tighter for longer, pressuring non-yielding assets in the immediate term. However, TD Securities maintains that gold’s longer-term outlook remains constructive beyond the current pressure period.
Traders and brokers should monitor the trajectory of inflation data and Fed commentary closely, as any softening in hawkish expectations could quickly reverse current gold weakness. The forecast adjustment affects positioning strategies for precious metals traders and those managing dollar-denominated portfolios across Q2 and Q3.
FXnCO Insight
Near-term gold longs face pressure until real yields peak, but accumulation opportunities may emerge for longer-dated positions if inflation fears eventually subside.
Source: FXStreet