TD Securities strategists say higher energy-linked inflation and delayed Federal Reserve rate cuts are keeping the opportunity cost of holding gold high in the near term. They add that a lack of Middle East capital in the gold market is a downside catalyst.<\/p>\n
They state that, even with a ceasefire, it may take time to reverse higher inflation expectations. They link this to higher energy, fertiliser, and chemical prices, which they say could make early Fed cuts difficult.<\/p>\n
They expect conditions to ease later as energy and interest rates normalise and the US Dollar weakens. On that basis, they forecast gold returning above $5,000 in the latter part of 2026.<\/p>\n
The opportunity cost of holding gold remains high, as elevated interest rates offer better yields elsewhere. With the latest March CPI report showing inflation at a stubborn 3.8%, we see the Federal Reserve’s hands as tied for the immediate future. This makes non-yielding assets like gold less attractive in the coming weeks.<\/p>\n
A strong U.S. dollar, with the DXY index hovering near 106, is creating significant resistance for gold prices. Compounding this, WTI crude has held firm above $90 a barrel, keeping inflation expectations high and delaying any potential monetary policy pivot. This environment supports strategies that are neutral to bearish on gold through the second quarter.<\/p>\n
For the near term, derivative traders could consider selling out-of-the-money calls with expirations in May and June 2026. This strategy collects premium by taking advantage of the expected range-bound price action caused by high carry costs. It allows for profiting from time decay as long as gold does not break out significantly to the upside.<\/p>\n
We are simultaneously looking at the latter half of 2026 for a major shift as energy costs and rates are expected to normalize. To position for the potential move toward $5,000, acquiring long-dated call options, such as those expiring in December 2026 or March 2027, is a viable strategy. These instruments provide exposure to the significant upside while capping the initial risk.<\/p>\n
A more complex approach involves using a calendar spread to capitalize on this timeline. By selling a near-term call option, a trader can fund the purchase of a longer-dated call option at a similar strike price. This position benefits from the expected sideways movement in the coming weeks while maintaining exposure to the anticipated rally late in the year.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" TD Securities warns energy-driven inflation and delayed Fed cuts keep gold costly, but sees $5,000 by late-2026.<\/p>\n","protected":false},"author":103,"featured_media":16973,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-47083","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t