Gold has rallied above the $1,700 level. Nonetheless, strategists at TD securities remain confident that the downtrend will prevail with a high margin of safety against a trend reversal.

Ignore the siren song

“The margin of safety against a sustained change in trend in gold is extremely elevated.”

“Unless the yellow metal stages a heroic recovery north of $2,000 before year-end, we remain confident that the downtrend in prices will prevail.”

“Gold prices have yet to price in the final stages of the hiking cycle, in which restrictive rates contribute to a significant underperformance relative to the earlier stages of the hiking cycle.”