The Canadian bank, TD Securities is urging investors to buy gold now, saying this is the moment to go long ahead of a massive rally.
The bank’s analysts expect gold prices to increase substantially over the course of the next 12 weeks. It expects Federal Reserve rate cuts to begin in May – and having held this position despite others calling for March cuts – is confident that its price projections are on course.
For investors, today’s prices represent the best opportunity to buy gold before prices spike in the next three months.
TD Securities’ senior commodity director, Daniel Ghali said the timing of rate cuts isn’t a critical factor for gold. The fact that rates will be lowered is crucial and it’s that action that will drive prices higher. He explained, “Whether it’s March or May is largely irrelevant. What the gold market does care about is the total amount of rate cuts priced in the next 12 months or so.”
There’s also additional support for gold in the form of strong demand elsewhere, offsetting any decline in price that could occur if the Feds decide on fewer rate cuts than expected. Ghali added, “Physical market buying activity has remained strong, and China is buying gold at a faster rate beyond the seasonal upswing which is tied to Chinese New Year. These pillars should limit the downside risk associated with fewer total Fed cuts priced into the next twelve months, tilting the balance of risks to the upside, with more extreme convexity to lower rates.”
The bank said that it is now tactical on gold prices for the longer term with bullish momentum expected. Don’t delay your own purchase. Buy now before prices rise.
