Gold: Strong fundamental support – TDS

After holding strong support levels and withstanding most of the March equity weakness, the second limit down day in a week eventually saw the yellow metal reverting to the levels seen during the last bout of liquidity selling in late February, around the $1560/oz, strategists at TD Securities brief. 

Key quotes 

“While these times of chaos can induce that kind of liquidity selling, the continued downward pressure on real interest rates, and the asymmetric nature of central bank reaction functions, offer strong fundamental support and suggests the dips will be bought by the investment community.

“The latest stimulus from the Fed and the market sense that further measures are coming, with TD expecting a 100bp cut from the Fed, will also offer support to the yellow metal as interest rates move ever closer to the 0 bound.”