Gold and silver have recently reached new record highs, fueled by political tensions in the U.S. and the debate about the independence of the U.S. Federal Reserve. However, from the perspective of TD Securities analysts, the risk-reward profile for gold is now more balanced than it has been for a long time. At the same time, TD Securities considers the platinum group metals (PGM) to be better positioned than gold and silver.
According to TDS, the trigger for the recent market movements was the reactions to the allegations made by the Trump administration against Fed Chairman Jerome Powell, which became known this week. However, the experts pointed out that classic stress indicators have so far shown hardly any fluctuations: there has been no recognizable panic among foreign holders of U.S. government bonds, nor have short-term yields or the term premium risen significantly. The movement on the foreign exchange market has also remained manageable. The precious metals complex in particular has “moved” – and thus gold again.
TD Securities: Why Gold Functions Differently as a “Debasement Trade”
TDS justifies the recent strength by saying that gold as an investment is best suited to profit from a loss of confidence in the U.S. dollar’s function as a store of value. This is precisely the narrative that has shaped the market over the past year. At the same time, however, he warns that this is also changing the mechanics of the gold market itself.
This is because the price increase is less a continuation of the previously dominant wave of demand from central banks, but increasingly a “debasement trade” – i.e. a positioning on the devaluation of real purchasing power, which may now have reached a possible turning point. In this context, the analysts emphasized that confidence in U.S. institutions is “bent” but not “broken”. In political and legal disputes, this confidence could also shift back in favor of the institutions.
He highlighted an upcoming Supreme Court decision as particularly relevant, which is intended to clarify whether the Trump administration can force the departure of incumbent Fed Governor Lisa Cook. According to Ghali, such a ruling could have significantly greater implications than the news noise observed to date and thus also move the US dollar more strongly. In this constellation, TD Securities believes that the gold market will be more sensitive to changes in sentiment.
Gold Price Towards $5,000 – But With Correction Potential
TD Securities believes that a level of USD 5,000 per ounce is fundamentally achievable. They argue that volatility in gold has recently increased significantly and that the distance to this mark therefore no longer seems as great as in quieter market phases. However, the crucial point is that the “debasement” trend could either intensify further in 2026 – or it could just as easily reverse.
TD Securities derives the “two-sided” risks, which are so explicitly emphasized, from precisely this. A central point: gold is no longer a fringe topic in portfolios. He pointed out that institutional investors are now heavily involved in physically backed gold ETFs. This helped in the upward phase – but could also mean that a change in sentiment leads to a stronger setback than in earlier cycles, when institutional positioning was lower.
TDS also classifies the development: In the 1970s, the devaluation was strongly market-driven, accompanied by high inflation. Today, on the other hand, inflation has recently been declining and is well contained by market expectations; inflation break-evens are also not currently signaling any pronounced fear of a resurgence. The driver of the last few months has therefore primarily been a confidence factor – and confidence can change more quickly than classic fundamental supply and demand relationships.
Platinum Group Metals Move into the Spotlight
Against this backdrop, TD Securities is currently positioning itself neutrally on gold at the existing price level. At the same time, he sees “further opportunities” more in other precious metals than in gold and silver – especially in the platinum group metals. TD Securities is thus shifting the focus within the precious metals complex: away from the pure continuation of the gold narrative and towards metals that, from the strategist’s point of view, are better positioned for significant gains.
Gold thus remains a sensitive indicator of political and institutional issues of confidence in the USA. However, the more gold has moved into the mainstream of institutional portfolios, the more a change in sentiment can have an impact in both directions. TD Securities therefore no longer sees only the scenario of sustained gains for gold, but a phase in which upward and downward movements have become equally plausible – and in which other precious metals are receiving increasing attention.
