TD Securities said precious metals, led by gold, have struggled to attract buying interest as elevated probabilities of further Federal Reserve rate rises keep real yields high and cap upside momentum. Commodity Trading Advisors are positioned with a small net short, while TD’s scenario modelling suggests prices are likely to remain range-bound under most outcomes.
The bank’s analysis linked the near-term outlook to energy markets and geopolitical risk. If renewed talk of a potential Iran deal helps restrain oil prices, TD indicated that a move towards the next downside triggers just below the key $4,000/oz level could be avoided for now. However, with the deal framework described as fragile and energy prices still elevated, the firm’s assessment points to an incomplete recovery in precious metals.
Federal Reserve Expectations And Precious Metals Positioning
We see precious metals struggling to find upward momentum because the market is pricing in a more aggressive Federal Reserve. The latest May 2026 inflation data, which showed CPI at 3.1%, is keeping expectations for rate hikes elevated. This makes holding non-yielding gold less attractive, so we believe selling out-of-the-money call options is a sensible strategy for now.
The big automated funds, or CTAs, are holding a small net-short position, suggesting they are not expecting a major price collapse but are positioned for weakness. The most recent Commitment of Traders report for the week ending June 9, 2026, confirms this, with managed money accounts holding a modest net short position of roughly 8,000 contracts. This reinforces our view that gold is likely stuck in a defined range, making strategies that profit from low volatility, like selling straddles, appealing.
Range-Bound Market Outlook And Trading Strategies
This tight trading range appears to be holding, and we believe the market will likely avoid testing the next major selling trigger just below the $2,400/oz level for now. Our focus is on range-bound trades, looking for the price to remain between $2,400 and $2,500 in the near term. We would consider buying puts if gold breaks convincingly below that $2,400 support.
However, we are not fully bearish, as the geopolitical situation remains fragile and energy prices are firm. With WTI crude oil holding steady around $95 a barrel, there is underlying support for gold as an inflation hedge. Therefore, any short-biased positions should be managed with tight stop-losses in case of a sudden price spike.
