TD Securities Sees Gold Rising Despite Near-Term Dip

Key Moments

Current Drivers Behind Gold’s Weakness

TD Securities strategist Bart Melek attributes the latest pullback in Gold prices to the combination of an Iran-related Oil shock, rising inflation expectations, and the prospect of an extended period of elevated interest rates. He notes that higher crude prices, a firmer USD, and expectations for tighter Federal Reserve policy have weighed on the metal even as geopolitical risks remain elevated.

“Gold’s pullback is very much driven by the Iran-related oil shock, higher inflation expectations, and a potential elevated interest rate environment. Higher crude prices, firmer USD and expectations for tighter policy have pushed gold lower despite elevated geopolitical risk.”

Key Support Levels and Oil Price Scenario

Melek highlights a critical long-term technical support zone for Gold in the $4,288–$4,000/oz area, based on technical indicators and the broader trend line. He suggests that a pronounced jump in Oil prices could be the trigger that sends Gold back to this range.

“Based on technicals and the long-term trend line, there is strong long term support in the $4,288-4,000/oz range. An oil spike to $150+/bbl could well get the yellow metal down to this level, as this assumes the Fed would want to tilt toward a relatively restrictive stance.”

Pathway Toward a $5,200+ Target

Looking beyond the current pressures, Melek sees scope for Gold to reestablish its bullish trajectory once the impact of the Iran conflict and Oil-driven inflation diminishes. He envisions conditions that could support a move toward $5,200+ by late 2026, contingent on shifts in monetary policy, yields, and currency dynamics, alongside investor and central-bank activity.

“There is a path to $5,200+ once the conflict and oil-driven inflation pressures fade. A later pivot toward the Fed’s maximum employment mandate, lower yields and a softer USD, plus renewed investor and central-bank demand, could reignite the bull trend after a potential test of $4,288–$4,000/oz long-term support.”

Potential Catalysts for a Renewed Bull Market in Gold

Melek points to the eventual easing of economic and fund-flow headwinds linked to the Iran war as a potential upside catalyst for the metal. He also cites prospective shifts in inflation expectations and Federal Reserve priorities as important drivers that could support fresh all-time highs.

“The eventual easing of economic and fund-flow headwinds associated with the Iran war will provide an upside catalyst for gold. Meanwhile, lower inflation expectations, and a Fed policy tilt back toward its maximum employment mandate—aimed at reversing the economic damage caused by the current negative supply shock in energy and other key commodities—should also act as further catalysts helping the yellow metal reach new record highs.”