TD comments on the break higher for gold:
- The breakout has driven the China Smart Money group of funds to add a significant amount of new length in SHFE gold. Considering that Shanghai gold net length remains near multi-year lows, a change in sentiment, potentially driven by the technical breakout, could attract a significant amount of buying interest from this cohort
- With US real yields plummeting, the tides could sway the persistent waves of ETF sellers to add length
- Gold prices need only close north of $1,860/oz to catalyze further CTA long acquisitions, which should cement a more supportive trend
- ...our ... framework, which stress-tests 75 technical indicators to identify the critical threshold for a change in trend, suggests that with gold prices north of $1,845/oz, an uptrend in gold should form by March 2022
