Gold: Higher Rate Risks to Keep Prices Range-Bound – TD Securities

TD Securities' latest view notes that while gold is supported by market concerns over Federal Reserve policy, higher interest rate risks are limiting its short-term upside, with prices expected to remain range-bound. As of writing, spot gold is trading near $4,394.62 per ounce, showing an overall consolidative pattern.

**High-Rate Environment Caps Gold's Upside**

Bart Melek, head of commodity strategy at TD Securities, analyzed that in a high real interest rate environment, the opportunity cost of holding gold rises significantly, directly leading to persistently weak demand from institutional investors, exchange-traded funds, and central banks. Concerns over the Fed maintaining a hawkish stance leave gold lacking momentum for a breakout rally. According to TD Securities' report, as long as key support levels are not decisively broken, gold's long-term uptrend will remain intact, but short-term upside is indeed limited.

**Technical Support and Risks Coexist**

From a technical perspective, gold has successfully held key support well above its 200-day moving average, which currently sits near $4,258 per ounce. Melek emphasized that this level serves as an important reference for determining whether the long-term trend has shifted. However, oil price volatility remains one of the main downside risks for gold. If oil prices continue to climb and push up inflation expectations, it could force central banks to maintain tightening policies, further pressuring gold prices.

**Long-Term Outlook Remains Bullish**

Despite short-term pressure, TD Securities remains optimistic about gold's long-term prospects. The firm previously forecast that gold prices could break through the $5,000 per ounce level by the end of 2026. Although current prices have pulled back notably from historical highs seen earlier this year, they still record significant year-over-year gains, indicating that underlying allocation demand for gold remains solid.