Gold reached a new record-high of $2,178 on Friday, briefly trading above $2,200. According to economists at TD Securities, the potential for further gains will increasingly depend on macroeconomic trends.
Insight into Gold Market Trends
Following the sharp rally, the risk-reward in Gold markets has diminished.
Macro traders seem to be underpositioned for a potential Fed cutting cycle, but the significant gap in their positioning compared to rates market pricing has decreased as expectations for fewer cuts have emerged and discretionary traders have covered their net short positions.
The intense buying activity seen from Shanghai traders is showing signs of tapering off.
While there is still room for Gold prices to rise, further gains will now rely heavily on macroeconomic tailwinds, which may limit the risk-reward ratio at current levels.
