TD Securities: Gold remains in a bullish trend, but don't forget to take profits
2025-09-04 23:36:33
Despite still-high inflation, the Federal Reserve's signal of a shift in monetary policy, hinting at an impending rate cut, has reignited interest in gold. However, the precious metal's breakout rally has also triggered some profit-taking.
Gold prices have surged by about $200 per ounce over the past six trading days and are now trading above $3,500 per ounce. Prior to this breakout, gold prices had been consolidating within a $200 range around $3,300 per ounce for four months.
While gold remains in a bullish trend, commodity analysts at TDS Securities announced on Wednesday that they had closed out their tactical long gold position, pocketing a profit of over $3 million.
TD Securities initiated this bullish trade in June, viewing gold as a "low-risk hedge against geopolitical uncertainty."
The Canadian bank initiated a position in gold at $3,345 an ounce, anticipating that rising stagflation concerns and eventual interest rate cuts would drive gold prices higher. TD Securities initially set a price target of $3,635 an ounce.
Although gold prices have not yet reached this target, analysts said they chose to take profits due to potential major news risks in the near term. The bank also pointed out that market volatility caused by global trade-related issues has eased and gold long positions have become crowded again, which may limit the upside of gold prices in the short term.
"Gold remains overbought, but holdings are low," the analysts said. "However, further entry of macro funds will eventually weaken the asymmetry of returns in the current holdings (i.e., narrowing of potential returns)."
However, commodity analysts at TD Securities do not believe that the gold bull run will end soon as they still expect the US dollar to weaken further.
(Source of spot gold 1-hour chart: Yihuitong)
"The U.S. dollar is (to some extent) losing its store of value function. This is the most critical long-term theme supporting global markets. Therefore, we remain bullish on gold at a strategic level. As long as this long-term theme persists, we will look for opportunities to re-position gold longs and seize the upward trend," the analysts said.
Gold prices have surged by about $200 per ounce over the past six trading days and are now trading above $3,500 per ounce. Prior to this breakout, gold prices had been consolidating within a $200 range around $3,300 per ounce for four months.
While gold remains in a bullish trend, commodity analysts at TDS Securities announced on Wednesday that they had closed out their tactical long gold position, pocketing a profit of over $3 million.
TD Securities initiated this bullish trade in June, viewing gold as a "low-risk hedge against geopolitical uncertainty."
The Canadian bank initiated a position in gold at $3,345 an ounce, anticipating that rising stagflation concerns and eventual interest rate cuts would drive gold prices higher. TD Securities initially set a price target of $3,635 an ounce.
Although gold prices have not yet reached this target, analysts said they chose to take profits due to potential major news risks in the near term. The bank also pointed out that market volatility caused by global trade-related issues has eased and gold long positions have become crowded again, which may limit the upside of gold prices in the short term.
"Gold remains overbought, but holdings are low," the analysts said. "However, further entry of macro funds will eventually weaken the asymmetry of returns in the current holdings (i.e., narrowing of potential returns)."
However, commodity analysts at TD Securities do not believe that the gold bull run will end soon as they still expect the US dollar to weaken further.
(Source of spot gold 1-hour chart: Yihuitong)
"The U.S. dollar is (to some extent) losing its store of value function. This is the most critical long-term theme supporting global markets. Therefore, we remain bullish on gold at a strategic level. As long as this long-term theme persists, we will look for opportunities to re-position gold longs and seize the upward trend," the analysts said.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
