Gold has managed to attracts fresh buying on the last day of the week. However, strategists at TD Securities expect the yellow metal to remain under downside pressure.

Money managers continue to sell their length

“As gold prices flirt with a break of a multi-decade uptrend near $1,675, the stars are aligning for additional downside in precious metals to ensue.”

“Gold tends to outperform in the earlier stages of a hiking cycle, but have displayed a systematic underperformance when markets expect the real level of the Fed funds rate to rise above the neutral rate. In turn, while gold prices may now have accurately captured the expected level of interest rates, they are not reflecting the implications of a sustained period of restrictive policy.”

“Money managers continue to sell their length, while ETF holdings of gold remain in a sustained downtrend which will soon erode all safe-haven-led gains since the war in Ukraine.”.