Despite the pullback in gold prices and the possibility of further decline, TD Securities warns investors not to short gold.

Bart Melek, head of commodity strategy at TD Securities, stated in the latest research report that there are indications that selling pressure may continue into this week. Although the downside risk of gold is increasing recently, Melek said that now is not the time to be bearish on gold. He pointed out, "Technically, US politics, monetary policy, and geopolitics all indicate that the market is unlikely to experience further sustained large selling

Melek added that he expects the support level for gold to be at $2389 per ounce.

Gold prices rose to a historical high last week as investors became increasingly concerned about the possibility of Trump winning the November presidential election. At the same time, the market has almost completely digested the September interest rate cut. Melek stated that these two factors will continue to support the long-term upward trend of gold, even if price volatility intensifies.

The slowdown in US economic activity will support the expectation that the Federal Reserve will launch a new easing cycle after this summer.

Melek said, "Once the market stabilizes and we see signs of economic slowdown confirmed, enough to justify the Federal Reserve's aggressive easing policy, then gold prices are likely to test new historical highs again. As institutional investors' interest in ETFs, gold, and futures returns increases, gold prices may rise thereafter. Therefore, we expect gold prices to continue hitting a quarterly average of $2475 and a trading high of over $2700

On July 21st local time, under strong pressure within the Democratic Party, current US President Biden announced his withdrawal from the 2024 presidential election and expressed support for nominating Vice President Harris as the Democratic Party's presidential candidate.

Rhona OConnel, head of market analysis at Stonex, said, "My instinctive reaction to Biden's withdrawal is that everything is undecided in the short term, especially the Democratic nomination issue. But it is likely to put the brakes on Trump's trade. In terms of hedging, purely from this perspective, the favorable wind for gold is stronger than the unfavorable wind. Biden's withdrawal at least means that it brings a stronger opponent to the Republican Party