TD Securities: Safe-Haven Interest In Gold To Continue

Tuesday August 16, 2016 09:16

TD Securities looks for any downward correction in gold to be contained and for safe-haven buying to continue. The metal has risen sharply this year but has been range-bound lately, with market worries about potential Federal Reserve rate hikes returning, causing some funds to liquidate positions, TDS says. “Still, the risk of an equity correction and negative yields for some $13 trillion worth of fixed-income assets should see safe-haven interest in gold continue,” TDS says. “This should make any correction well contained. Hedge funds maintain a near record long position in Comex gold and the opportunity (cost) to hold the metal will remain very low as global sovereign yields hover near record lows as a result of central banks continued experimentation with unconventional monetary policy. Indeed, the risk of ‘helicopter-money policies’ and concerns that the current and recent massive central-bank asset purchase programs create a problem likely means that investors will continue to hold gold as a hedge against the unknown.”