TD Securities strategists have published a note arguing that gold prices are likely to remain constrained in the near term, supported by doubts about the Federal Reserve but limited by the risk of higher interest rates. They see the metal trading in a $4,200–$4,500 per troy ounce range into early 2027, before a more sustained rally later that year.
Why gold is range-bound
The strategists point to oil-driven inflation as the key factor keeping front-end rate expectations elevated. Oil supply remains at risk due to ongoing hostilities in the Persian Gulf, and the note warns that energy prices could still rise enough to alter expectations for interest rates this year. The bar for another Federal Reserve rate hike remains low should oil prices spike again and inflation concerns re-emerge.
Because gold pays no yield, higher interest rates increase the opportunity cost of holding it compared to yield-bearing assets. The strategists say a re-emergence of inflation concerns would likely force gold traders to reprice policy expectations, pushing the dollar higher and limiting gold’s upside.
What could change the outlook
Later in 2027, the picture could brighten. TD Securities expects easing inflation, a weaker US dollar, and lower carry costs – the net cost of holding a position – to drive gold prices materially higher in the second half of that year. The note acknowledges that gold, along with silver and platinum group metals, has benefited from the narrative that the Fed will not raise rates this year due to political worries and a lacklustre labour market. But it adds that there is limited additional upside from current levels for now.
Current market conditions illustrate the tug-of-war. Gold is trading below $4,400 in early European dealing on Tuesday, snapping a two-day winning streak as the US dollar firms. Inflation risks stemming from higher oil prices back the case for at least one rate hike by the Federal Reserve in 2026.
For the latest on where the metal is trading now, check the live gold price.
Key takeaways
- TD Securities forecasts gold in a $4,200–$4,500/oz range into early 2027.
- The risk of higher rates from oil-driven inflation caps near-term gains.
- A rally is expected later in 2027 on easing inflation, a weaker US dollar, and lower carry costs.
Common questions
What is TD Securities' gold price forecast?
TD Securities expects gold to trade between $4,200 and $4,500 per troy ounce into early 2027, with limited near-term upside. Later in 2027, easing inflation, a weaker US dollar, and lower carry costs could drive prices materially higher.
What could trigger a rate hike by the Federal Reserve?
The note says the bar for another rate hike remains low if oil prices spike again and inflation concerns re-emerge. Ongoing risks to oil supply from tensions in the Persian Gulf could raise energy prices enough to alter front-end rate expectations.
Gold’s path over the next year will hinge on whether oil-driven inflation forces the Fed to tighten policy, or whether the economy slows enough to allow the central bank to stand pat. For now, the metal remains caught between geopolitical support and the risk of tighter monetary conditions.