TD Securities analyst says gold is undervalued

The price of gold has recently rebounded after reaching a record high of over $3,500 per ounce. However, according to Bart Melek, an analyst at TD Securities, the metal's rally is just beginning—gold is still significantly undervalued.

The expert's inflation-adjusted target price for gold is $3,544 per ounce, though he says it could reach even higher levels. Melek added that $3,100 is an important support for a possible correction.

The analyst expects weak economic growth in the US to lead to lower Federal Reserve interest rates and a subsequent increase in gold demand. Additionally, investors will see the precious metal as a safe haven in case of a stock market downturn.

Melek also draws attention to significant investment demand for gold exchange-traded funds (ETFs), particularly in China, where traders are trying to protect their wealth from the impacts of global trade tensions.

Finally, Melek adds that demand from central banks worldwide continues to support gold prices amidst the dollar's declining reliability as a reserve currency.