TD Securities: Gold prices are expected to bottom out around $3,900 this year and could break through $5,300 in 2027.
2026-06-30 01:55:38
The gold market started the week weakly, with prices barely holding the key support level of $4,000 per ounce. Amidst escalating inflation concerns, TD Securities predicts that this important support level will eventually be breached.
Bart Melek, head of commodities research at TD Securities, released a new gold research report and advised investors that gold is currently in a correction phase of a bull market, and the price is likely to break below $3,900/ounce to complete this round of adjustment and bottoming out. However, he clearly emphasized that this price correction is not the end of the bull market, and the low prices will present an excellent strategic entry opportunity; the overall long-term bull market trend for gold remains unchanged.
Spot gold was quoted at $4,022.30 per ounce during the session, down 1.6% on the day, indicating significant downward pressure in the short term.
Key negative factor: Continued volatility in high oil prices limits the upside potential for gold prices.
Melek pointed out that international oil prices are the biggest short-term risk factor for gold prices at present. The persistently high oil prices will continue to push up global inflationary pressures, indirectly suppressing the performance of gold.
Global crude oil inventories have fallen to historically low levels due to shipping disruptions in the Strait of Hormuz, creating a strong rebound potential in the oversold oil market. Research reports predict that Brent crude oil prices may climb to the $90-$110 per barrel range. Rising oil prices will further increase market inflation expectations, forcing the Federal Reserve to maintain a tight monetary policy, directly increasing the holding costs and opportunity costs of gold, and weakening its attractiveness as an investment.
Despite ongoing Middle East peace negotiations, regional conflicts have not been completely resolved, and there remains a possibility of retaliatory strikes between the US and Iran, continuing to support oil prices due to geopolitical risks. Brent crude oil prices are currently holding above $73 per barrel, with a daily increase of over 1%.
Supply bottlenecks remain unresolved: High oil prices unlikely to reverse in the short term.
Regarding market expectations that "the conclusion of peace negotiations will alleviate pressure on oil prices," Melek offered a cautious assessment. He stated that even if the Strait of Hormuz resumes free shipping of crude oil and tanker passage is unimpeded, the balance of supply and demand and the recovery of inventories in the crude oil market will require a long period and cannot be achieved quickly.
The current downward trend in crude oil inventories is expected to continue until October, with inventory levels falling to unsustainable lows. Brent crude is currently trading at around $74 per barrel, and there is still potential for a potential surge to $100 per barrel.
Gold prices exhibit a significant inverse correlation with oil prices and the US dollar index. Persistently high energy prices will not only continue to put downward pressure on gold prices but will also lead the market to pre-price the risk of fuel shortages in many parts of the world. Even if shipping issues are resolved immediately, the constraint of tight crude oil supply cannot be eradicated in the short term, and the environment of high inflation and tight monetary policy will continue to suppress gold prices.
Long-term trend reversal: Gold prices are expected to hit a new high of $5,300 in 2027.
While acknowledging the short-term downside risks for gold, Melek is extremely optimistic about its medium- to long-term trend, predicting a strong rebound in gold in 2027, with prices eventually breaking through $5,300 per ounce and setting a new historical high.
He analyzed that the economic impact and negative effects of capital flows caused by the Middle East geopolitical conflicts will eventually subside, which will become the catalyst for the first round of gold price increases. At the same time, as market inflation expectations gradually decline, the Federal Reserve's policy focus will return to its core goal of full employment.
Faced with downward economic pressure from energy and core commodity supply shocks, the Federal Reserve is highly likely to mitigate risks by releasing liquidity and implementing loose monetary policies. These multiple positive factors will collectively push gold prices higher. In addition, the US national debt may be approaching $40 trillion, and the persistently high fiscal deficit will reignite market concerns about financial repression and the depreciation of the dollar's purchasing power, providing long-term support for gold.
Policy logic supporting this: The Fed's dovish stance is reshaping gold's safe-haven value.
Although the Federal Reserve is currently taking a hard line against inflation, Melek believes that there are no hardliners within the Fed like Paul Volcker who would stop at nothing to suppress inflation. An extremely tight policy environment is unlikely to emerge, and this situation will continue to drive demand for gold as a safe haven.
Looking ahead to May 2026, the proportion of dovish members on the Federal Open Market Committee (FOMC) will increase significantly, and the market's default 2% inflation target will change from a "hard red line" to a flexible reference standard, significantly enhancing the Fed's policy inclusiveness.
Meanwhile, the market widely anticipates that the Federal Reserve may launch a de facto quantitative easing policy, using liquidity adjustments as a pretext to lower long-term US Treasury yields, reduce social financing costs, and support the real economy. Against this backdrop, US Treasury yields will struggle to offset inflationary losses, significantly diminishing their investment value. Gold, on the other hand, relies on its fixed production costs and possesses long-term inflation-hedging properties, making it a superior safe-haven asset compared to US Treasuries.
Bart Melek, head of commodities research at TD Securities, released a new gold research report and advised investors that gold is currently in a correction phase of a bull market, and the price is likely to break below $3,900/ounce to complete this round of adjustment and bottoming out. However, he clearly emphasized that this price correction is not the end of the bull market, and the low prices will present an excellent strategic entry opportunity; the overall long-term bull market trend for gold remains unchanged.
Spot gold was quoted at $4,022.30 per ounce during the session, down 1.6% on the day, indicating significant downward pressure in the short term.
Key negative factor: Continued volatility in high oil prices limits the upside potential for gold prices.
Melek pointed out that international oil prices are the biggest short-term risk factor for gold prices at present. The persistently high oil prices will continue to push up global inflationary pressures, indirectly suppressing the performance of gold.
Global crude oil inventories have fallen to historically low levels due to shipping disruptions in the Strait of Hormuz, creating a strong rebound potential in the oversold oil market. Research reports predict that Brent crude oil prices may climb to the $90-$110 per barrel range. Rising oil prices will further increase market inflation expectations, forcing the Federal Reserve to maintain a tight monetary policy, directly increasing the holding costs and opportunity costs of gold, and weakening its attractiveness as an investment.
Despite ongoing Middle East peace negotiations, regional conflicts have not been completely resolved, and there remains a possibility of retaliatory strikes between the US and Iran, continuing to support oil prices due to geopolitical risks. Brent crude oil prices are currently holding above $73 per barrel, with a daily increase of over 1%.
Supply bottlenecks remain unresolved: High oil prices unlikely to reverse in the short term.
Regarding market expectations that "the conclusion of peace negotiations will alleviate pressure on oil prices," Melek offered a cautious assessment. He stated that even if the Strait of Hormuz resumes free shipping of crude oil and tanker passage is unimpeded, the balance of supply and demand and the recovery of inventories in the crude oil market will require a long period and cannot be achieved quickly.
The current downward trend in crude oil inventories is expected to continue until October, with inventory levels falling to unsustainable lows. Brent crude is currently trading at around $74 per barrel, and there is still potential for a potential surge to $100 per barrel.
Gold prices exhibit a significant inverse correlation with oil prices and the US dollar index. Persistently high energy prices will not only continue to put downward pressure on gold prices but will also lead the market to pre-price the risk of fuel shortages in many parts of the world. Even if shipping issues are resolved immediately, the constraint of tight crude oil supply cannot be eradicated in the short term, and the environment of high inflation and tight monetary policy will continue to suppress gold prices.
Long-term trend reversal: Gold prices are expected to hit a new high of $5,300 in 2027.
While acknowledging the short-term downside risks for gold, Melek is extremely optimistic about its medium- to long-term trend, predicting a strong rebound in gold in 2027, with prices eventually breaking through $5,300 per ounce and setting a new historical high.
He analyzed that the economic impact and negative effects of capital flows caused by the Middle East geopolitical conflicts will eventually subside, which will become the catalyst for the first round of gold price increases. At the same time, as market inflation expectations gradually decline, the Federal Reserve's policy focus will return to its core goal of full employment.
Faced with downward economic pressure from energy and core commodity supply shocks, the Federal Reserve is highly likely to mitigate risks by releasing liquidity and implementing loose monetary policies. These multiple positive factors will collectively push gold prices higher. In addition, the US national debt may be approaching $40 trillion, and the persistently high fiscal deficit will reignite market concerns about financial repression and the depreciation of the dollar's purchasing power, providing long-term support for gold.
Policy logic supporting this: The Fed's dovish stance is reshaping gold's safe-haven value.
Although the Federal Reserve is currently taking a hard line against inflation, Melek believes that there are no hardliners within the Fed like Paul Volcker who would stop at nothing to suppress inflation. An extremely tight policy environment is unlikely to emerge, and this situation will continue to drive demand for gold as a safe haven.
Looking ahead to May 2026, the proportion of dovish members on the Federal Open Market Committee (FOMC) will increase significantly, and the market's default 2% inflation target will change from a "hard red line" to a flexible reference standard, significantly enhancing the Fed's policy inclusiveness.
Meanwhile, the market widely anticipates that the Federal Reserve may launch a de facto quantitative easing policy, using liquidity adjustments as a pretext to lower long-term US Treasury yields, reduce social financing costs, and support the real economy. Against this backdrop, US Treasury yields will struggle to offset inflationary losses, significantly diminishing their investment value. Gold, on the other hand, relies on its fixed production costs and possesses long-term inflation-hedging properties, making it a superior safe-haven asset compared to US Treasuries.
- Risk Warning and Disclaimer
- 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.
