Gold: Next leg higher toward $5,000 – TD Securities

TD Securities’ Ryan McKay argues Gold is entering a new bullish phase, with speculative, ETF and central bank flows reinforcing resilience despite further Fed hikes. The bank sees growing investor and official-sector appetite, de-dollarization and Chinese demand supporting a renewed bull run, with Spot Gold potentially making a sustained move above $5,000/oz into 2027.

Flows and macro drivers support upside

"The time is coming for the next leg higher in gold. The yellow metal has shown the ability to hold strong despite Fed hikes, and with investor and central bank appetite growing again, gold looks poised to make a renewed run at prices north of $5,000/oz into 2027."

"Gold is set for the next leg higher. The tides have turned in the gold market, and flows from various longer-term focused investor cohorts have accelerated in recent months. We believe these flows will allow the yellow metal to withstand a higher interest rate policy and start a new bull run to above $5,000/oz into 2027."

"With three more Fed hikes already priced in, any disappointment in hitting this high bar would only accelerate the upside for the yellow metal, in our view."

"This suggests there is still plenty of room for investors to add more length as the outlook for precious metals strengthens. Meanwhile, CTA flows have been a net-negative in recent weeks, weighing on the late summer rally as systematic funds liquidated their modest long positions heading into the September FOMC. Momentum fund positioning is now fairly clean, and can also offer an extra upside push if discretionary flows can reignite the gold rally as we expect."

"Central bank flows have also been accelerating. As de-dollarization, dollar debasement themes, and fiscal distrust became prevalent market drivers again, we expect both reported central bank buying figures and broader unreported central bank buying estimates to show a strong pace of accumulation this year."