XAU/USD to lurch higher towards summer 2020 highs of $2,075 – TDS

Russia-Ukraine conflict-driven commodity price spikes and the resulting higher inflation expectations have prompted money managers to extend their net long gold exposure. Strategists at TD Securities believe that the yellow metal could reach 2020 summer highs of $2,075.

Gold to remain strong until the Fed makes a commitment to crush inflation

“Specs have aggressively covered their short positions, as it became apparent that the conflict in Europe is set to lift inflation and concerns surrounding an economic slowdown will likely convince the Fed and other key major central banks to take a balanced approach to monetary policy.”

“With real 10-year yields dropping to -0.97%, it would not be surprising to see gold price to move toward the summer 2020 highs of $2,075/oz.”

“Gold will likely stay strong until it becomes clear that the Fed will make a commitment to crush inflation. But this decision will not be taken quickly, likely after it is known what the inflation trajectory is longer-term.”