Gold positioning for $1,320 an ounce sooner than anticipated
NEW YORK (Scrap Register): TD Securities said gold may be positioning for a move toward the low $1,320-an-ounce area sooner than anticipated and says it still looks for $1,360 in three months and $1,400 in 2020.
“Ample risk appetite and a firm USD [U.S. dollar] prompted specs to aggressively cut their net exposure last week,” TDS said.
As such, with the USD range-bound, equities showing less strength and the with the market firmly believing anticipating that the upcoming FOMC [Federal Open Market Committee] minutes will cite chatter surrounding rate cuts, which would confirm Fed dovishness, the yellow metal has more upside.
With President Trump's two very politically politically-motivated appointees being have been proposed for the Fed's two vacant spots seats, there sparking is concern the U.S. central bank may increasingly be getting politicized.
Meanwhile, analysts cited news that China’s central bank bought gold for the fourth consecutive month in March as yet another factor that could help lift prices.
“We would not be surprised to see the yellow metal move toward the low $1,320/oz range in the not-too-distant future,” TDS noted. “We suspect that there is the potential for aggressive CTA [Commodity Trading Adviser] buying at with prices level north of $1,290/oz, which could help support see a sharp rally given recent long liquidations and increases in short positioning.”
“Longer term, we continue to be comfortable with our long gold trade which we entered when the yellow metal was $1,298/oz, with a three-month target of $1,360/oz, before a move toward $1,400/oz next year,” TDS added.