TD strategist sees few willing sellers in gold and expects more catalysts to boost participation
Gold’s rally may be far from over, with low participation and limited selling pressure setting the stage for further gains, according to Daniel Ghali, director of commodity strategy at TD Securities.
Ghali told BNN Bloomberg that despite gold trading near record highs, “participation at this moment in time is so low that it’s really just hard to see who has more to sell.”
He argued that the rally isn’t overextended because “gold appears to be technically overbought but it’s actually under-owned.”
Ghali said the perception that gold is a crowded trade is misplaced.
“There’s this perception that gold is a crowded trade, that it’s over-owned,” he said. “The US dollar is partly losing its store of value, gold is benefiting from that and the outlook for gold from here is exceptionally strong.”
He added that few investors currently hold large gold positions that would create downward pressure on prices.
“Who really has a lot of gold to sell? It’s not really clear to me, which tells you that selling exhaustion appears imminent to us,” he said.
Although gold prices have plateaued in recent months, Ghali attributed the pause to a temporary easing in global trade tensions.
He pointed to macroeconomic catalysts such as tariff risks, interest rate uncertainty, and central bank credibility that could re-ignite demand.
According to Ghali, buying impulses in the east and west are driven by different fears—currency depreciation in the east, and stagflation or recession in the west.
“The détente on trade has eased those fears, and in turn, the buying impulse that drove gold prices higher earlier this year has faded,” he said.
However, he emphasized that upcoming catalysts could revive demand: “It’s hard to see how participation in gold is not going to rise from current levels.”
As reported by BNN Bloomberg, the August gold contract rose US$4.90 to US$3,348.00 an ounce on Thursday.
