Gold: Long-term inflation expectations lifts prices higher – TDS

Gold trades around the $1770 region and could surpass the $1800 level as inflation-hedge assets increase its popularity in the opinion of strategists at TD Securities.

Key quotes

“Gold is on the edge of a breakout. Price action continues to lend strength to our view that gold's role is shifting from a safe-haven asset to an inflation-hedge product.” 

“The entire maturity spectrum of inflation breakevens are still priced below policy objectives. In this context, declining real rates should imminently support gold prices into the $1800s.” 

“The world-war era fiscal and central bank stimulus, the change in the central bank template that will incorporate 'symmetric inflation targets' and unwinding globalization, suggest that inflation-hedge assets may grow in popularity.”