A snippet via TD from late last week on why gold is going to keep heading higher, the bank citing plenty of reasons as follows:
Covid fears have interrupted, but not cancelled gold's imminent breakout.
Indeed, the yellow metal's third attempt to break-out into the $1800s was interrupted by renewed virus concerns, which have paused the rise in long-term inflation expectations that we have seen over the past few trading sessions.
Nonetheless, we expect that growing confidence in the economic recovery, amid extremely low rates volatility, will help long-term inflation expectations continue to rise. In this context, declining real rates will support gold prices into the $1800s.
The world-war era fiscal and central bank stimulus, the change in the central bank template that will incorporate 'symmetric inflation targets' and unwinding globalization, also suggest that inflation-hedge assets may grow in popularity. In this context, fading the reversal of safe-haven flows will continue to be a profitable trade.
