Gold price has extended its gains above $1,720. Nonetheless, strategists at TD Securities still believe that XAU/USD is likely to trend lower.

Shanghai traders start to shy away from gold

“A prolonged period of restrictive rates suggests traders should ignore gold's siren calls, as a sustained downtrend will likely prevail, while quantitative tightening continues to drive real rates higher.”

“Money managers hold their largest net short in gold since 2018, driven by trend followers. We expect a break north of $1,740 could fuel CTA stop-outs, suggesting the squeeze could run further.” 

“Shanghai traders have shied away from precious metals, leaving the market with fewer offers.”