Economists at TD Securities believe that discretionary trades have yet to buy into the Gold rally. 

Positioning in Gold is far from bloated

“The bar for algorithmic liquidations in Gold to pressure prices is elevated, whereas Shanghai trader length is nearing year-to-date lows. Further, dry-powder analysis highlights that position sizing for gold bulls remains near average levels, which points to less pain associated with the recent pullback. Our gauge of discretionary trader positioning continues to suggest that this cohort has yet to participate in the precious metals rally.”

“Looking forward, we expect discretionary capital to flow towards Gold given strong historical linkages with market expectations for a deepening Fed cutting cycle over the next year.”