Precious metals: Silver to underperform gold – TDS

Gold continues to make new highs, touching the $1,700/oz level as equities went limit down overnight, while yields continue to plummet to the 0 bound, and the dollar weakens, strategists at TD Securities inform.

Key quotes

“Prices have now edged off the highs, and near term rushes to liquidity remain a risk.” 

“We note that positioning is becoming stickier at higher levels as further rate cuts globally offer fundamental backing, suggesting the precious metals rally is here to stay.” 

“For silver and the PGMs, the exposure to industrial demand, and lower beta to monetary policy and safe-haven flows should see them underperform the yellow metal. CTAs have been well-positioned for the rallies, and we do not anticipate any major systematic flow on the day.”