Weaker economic data has provided a much-needed jolt to the yellow metal. Nevertheless, strategists at TD Securities still expect gold to struggle to post further gains.
The path of least resistance for gold is still lower
“Yesterday's economic data disappointments have seen the yellow metal hold north of levels that could see CTA funds' recently acquired net-short positions end up being short-lived.”
“The bounce in prices has brought an end to ETF outflows, ending the streak at ten straight days. But, with downside momentum and the prevailing negative sentiment across precious metals more firmly entrenched, gold may face a high bar to maintain this recovery.”
“Fed Chair Powell signalled a willingness to sacrifice some economic growth in an effort to tame inflation, suggesting the path of least resistance for gold is still lower.”