Gold: Higher Range Holds, but Next Leg Up Delayed – TD Securities

TD Securities analysts Ryan McKay and Bart Melek said in their latest view that gold and the broader precious metals complex are likely to remain in a higher trading range, but the next leg higher may be delayed. Spot gold was last trading near $4,480.32 per ounce, holding in a high-level consolidation pattern.

**Short-Term Corrective Pressure Remains**

The firm said energy price volatility is the biggest near-term variable. Should crude oil rebound to the $90-$110/barrel range on supply tightness, it would rekindle inflation expectations, reinforce the Fed's hawkish stance, and in turn raise the opportunity cost of holding gold. Melek noted earlier that after gold's breakout in August, prices have surged over 20% in two months and are up more than 50% year-to-date, leaving the metal technically overbought in the near term. Any doubt cast on the Fed's easing path could trigger profit-taking.

**Medium-to-Long-Term Thesis Remains Intact**

Despite near-term consolidation, TD Securities remains constructive on gold's long-term outlook. The firm expects that with the Fed's policy environment gradually shifting toward easing around 2026, coupled with continued deterioration in U.S. fiscal conditions and debt levels approaching $40 trillion, concerns over currency debasement will reinforce gold's allocation appeal. TD Securities forecasts average gold prices above $4,400/oz in the first six months of 2026, with a potential push toward $5,300/oz in 2027.

**Institutional Positioning and Central Bank Buying Provide Support**

Melek noted that elevated short-term rates had previously dampened fund managers' appetite for long gold positions. However, with growing expectations of Fed rate cuts, lower carry costs have drawn some capital into the gold market since late summer. Sustained central bank buying and recovering investment demand provide key support for gold at elevated levels. That said, should Congress pass a funding bill to end the government shutdown, gold could face some near-term pressure.