Gold: Pullback before potential $5,200 breakout – TD Securities

💡 DMK Insight

Gold’s recent drop isn’t just about the shiny metal—it’s a reflection of broader economic pressures. With the Iran-driven oil shock pushing energy prices higher, inflation expectations are on the rise, which is putting pressure on the Fed to maintain a tighter monetary policy. A firmer US Dollar compounds this issue, making gold less attractive as a hedge. Traders should pay attention to how these factors interplay, especially if inflation data continues to surprise to the upside. This could lead to further declines in gold, particularly if it breaks below key support levels. But here’s the flip side: if geopolitical tensions escalate, we might see a flight to safety that could reverse gold’s current trend. Keep an eye on the $1,800 level—if gold can hold above that, it might signal a potential bounce back. Watch for upcoming inflation reports and Fed commentary, as these will be crucial in shaping market sentiment and gold’s trajectory in the coming weeks.