NEW YORK (Scrap Register): TD Securities envisions a rally in gold and says the move should have some legs.
Analysts said conviction in financial markets is growing for the next Federal Reserve policy move to be a rate cut, with interest-rate markets pricing a nearly 75% probability of this before the end of 2019. Analysts see a move toward a $1,360-an-ounce target.
“With futures prices above our key trigger range, we expect CTAs [Commodity Trading Advisers] to provide a firm bid in gold as systematic trend followers dramatically increase the size of their gold length,” TDS added.
“We think this rally will have some legs, as money managers increasingly look to protect themselves from potential equity corrections, while there are few reasons to fear the Fed, and CTA buying will likely add to upside flow,” TDS noted.