Gold to win $ 1,300, watch for data deterioration – TD Securities

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(Kitco News) – "Buying the dips" will define the latest gold exchange model as a precious metal moving towards $ 1,300 in the short term, guided by a dovish federal reserve and risk aversion to trade tensions between the United States and China, according to TD Securities.

"Gold should improve and tend to $ 1300 / oz. Lower rates, a flat curve and a rising probability of rising stock markets are all factors that help gold … suggest that declines could be on the agenda in this precious space, "have writes Monday the strategists of TD Securities in a note.

The precious metals sector is finally beginning to benefit from a new risk aversion to the escalating tensions between the United States and China, said TD Securities.

"[Gold] rebound[ed] from the lowest of $ 1,267 / oz to $ 1,288 / oz and the silver jump[ed] from 14.38 USD / oz to 14.65 USD / oz, "said the strategists.

Another key element that gives gold in hand is a more accommodating perception of the Federal Reserve, said TD Securities, adding that the US central bank could lower rates faster than expected.

"The slowdown in the global economy will prompt the Fed to cut spending as soon as possible, while keeping the global yield curve flat and reducing interest rates," said TD Securities. "The FOMC minutes suggested that rates would remain unchanged even as the economy picked up, causing the strength of the US dollar to fall, while rates continue to fall as the curve returns to the US dollar. Inversion, thus helping the gold to recover. "

On Monday, gold started in the flat Asian session, for the last time at $ 1,284.70, according to Kitco's aggregated charts.

"The persistence of the central bank's vision and potential growth fears in the face of rising trade tensions should prompt fund managers to increase their allocations to the yellow metal as data begin to deteriorate," writes TD strategists.