TD Securities’ Senior Commodity Strategist Daniel Ghali argues that fear of US Dollar debasement, rather than actual money supply growth, has been a key driver of Gold prices. Ghali highlights surging retail bullion demand, which has outpaced official sector buying, and notes that upcoming US Supreme Court decisions could influence trust in US institutions and thus Gold market dynamics.

Debasement narrative and retail bullion flows

"At what pace is the USD being debased? The hard truth: fear of debasement has been a more acute driver of precious metals prices than debasement itself."

"Yet, the debasement narrative has helped gold markets step out of the fringe, with the most popular gold-backed ETF now roughly 65% as widely owned as the most popular ETF in history."

"Trust in US institutions has bent, but we argue it has not yet broken."

"We expect Supreme Court decisions will play a significant role for this driver of market prices, with a focus on IEEPA tariffs for geopolitical risks, and on the Lisa Cook case for central bank independence."

"Positioning analytics in gold markets continue to be obscured by the unprecedented prevalence of retail demand for bullion, with this cohort having purchased roughly 80% more gold over the last quarter than global central banks, sovereign wealth funds, state banks and other official sector institutions combined."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)