Gold: Another dip in the near-term – TDS

Using the average bid and ask size posted in gold futures' closing session as a measure of depth, strategists at TD Securities illustrate that liquidity has dried up.

Key quotes

“The physical-futures basis may have normalized, as gold traders found ways to navigate around the logistical constraints, sending Comex inventories surging higher in response.”

“We continue to see dislocations that could be fueled by the vanishing of liquidity, in this context, we suspect that liquidity takers will have a larger impact on price action.”

“Given we estimate that a break below the $1580/oz range would imply a modest round of liquidations, we could see another dip in gold prices in the near-term.”