Gold trade in first half of 2026 will likely continue: TD Securities' Melek

Core Viewpoint - Gold and silver are reaching new records, marking their best year since 1979, while copper is also at new highs, achieving its best year since 2009 [1] Group 1: Commodity Market Outlook - Gold is expected to continue its upward trend in the first half of 2026, with a projected quarterly high of $4,400, indicating a trading high of approximately $4,647 [2] - The anticipated continuation of this commodity trade is attributed to lower Federal Reserve funds rates and a steepening yield curve, alongside persistent inflation above the 2% target [2] Group 2: Portfolio Adjustments - Central banks globally are adjusting their strategies, with investors shifting their portfolios to include up to 25% exposure in commodities, which encompasses gold, silver, oil, and copper [3] - The traditional 60/40 portfolio model is evolving as investors seek to hedge against the declining value of the US dollar [3] Group 3: Economic Considerations - The economy is showing signs of slowing, with employment numbers declining, which may lead to reduced inflationary pressures and a potential decrease in aggressive tariff actions against US trading partners [5] - The Federal Reserve is expected to maintain a cautious approach to easing, influenced by the upcoming changes in leadership and the administration's pressure for accommodative policies [6][7]