Gold is finding some respite. However, the path of least resistance for XAU/USD is still lower, economists at TD Securities report.
CTA selling flows have largely run their course
“Should prices hold the $1,830 region, CTA funds may begin to add back some length in the shiny metal. But, with downside momentum and the prevailing negative sentiment across precious metals more firmly entrenched, any such buying flows would likely face a high bar to be maintained.”
“Fed Chair Powell's willingness to take rates beyond neutral in an effort to tame inflation, while sounding tone-deaf regarding economic worries, suggests the path of least resistance for gold is still lower.”
“ETF holdings of gold continue to fall for a tenth straight day while positioning analytics still argue for the potential of additional pain for gold bugs.”