Gold: Precious metal rally here to stay?

Amid increased global economic stimulus expectations, in a bid to tackle the coronavirus impact, the upside momentum in the precious metal, gold, remains intact, analysts at TD Securities (TDS) cited in its CTA Position Tracker.

Key quotes

"Gold is holding at higher levels as extended speculative positioning has been harder to shakeout with dips becoming shallower, while ETF holdings have also surged to all time highs in recent days. While short-term runs to liquidity remain a risk, further rate cuts and stimulus measures globally offer fundamental backing, suggesting the precious metals rally is here to stay.

On the PGM side, the news of a partnership between Sibanye-Stillwater, Implats and BASF to work on new tri-metal autocatalyst that can allow for partial substitution of palladium for platinum has helped support platinum off the recent lows.

With that said, platinum is still far away from additional CTA buying, which would take place above $944/oz. Aside from platinum CTAs have been well-positioned for the precious metal rallies, and we do not anticipate any major systematic flow on the day."

Gold under pressure below $1660

Gold prices on Comex trade on the back foot below $1660 despite the risk-off action seen in the Asian equities and Wall Street futures, as investors remain wary over the US economic response to the coronavirus outbreak.