Gold is defending gains amid a broadly weaker US dollar. However, strategists at TD Securities note that the yellow metal stays immersed in a strong downtrend. 

The pain trade is still to the downside

“Gold prices remain in a strengthening downtrend, despite the recent respite afforded by the slump in USD.”

“The risk of capitulation remains prevalent for the yellow metal moving into October, with strong data continuing to point to a more aggressive Fed rate path ahead.”

“Considering the increase in inflation's persistence this cycle, a restrictive regime may last longer than historical precedents with the Fed likely to keep rates elevated for some time, even as recession risks rise, which argues for a prolonged period of pronounced weakness in precious metals.”