Gold resists breaking bull-market-era trendline. Strategists at TD Securities expect the yellow metal to trend lower on removal of $1,745 by July.  

Ongoing position squeeze will prove mild

“The set-up is in gold ripe for another position squeeze, with participants including turning bearish following the decisively hawkish Fed meeting, only to find substantial volume on the bid keeping prices from breaking below their bull-market-era trendline support. This time, however, the bar is high for a substantial squeeze, suggesting macro headwinds will ultimately weigh on gold.”

“A break below $1,745/oz by July would establish a sustained downtrend in the yellow metal.”

“While official central bank holdings do not show a sustained trend of purchases, this cohort appears most likely to have been on the bid in recent weeks. However, Shanghai length is vulnerable following Chinese New Year, while a CTA positioning squeeze is also unlikely to lend further support given the bar for a buying program is elevated.”