The rally in precious metals, including Gold (XAU/USD) and Silver (XAG/USD), gained momentum following the release of below-expected US inflation data, according to insights from TDS senior commodity strategist Ryan McKay. Asian demand for these metals has notably increased, reflecting a growing trend.
“The below-expected inflation data has amplified the ongoing rally in precious metals, complementing earlier boosts from softer employment figures which heightened expectations of an imminent Federal Reserve rate cut in September,” McKay explained.
He emphasized that a significant macroeconomic cohort, previously cautious, is now showing renewed interest in Gold. “We’re beginning to see signs of this renewed interest with ETF positions climbing steadily in July, following the first monthly increase since May 2023,” McKay noted. Additionally, despite flat Chinese Gold reserves for two consecutive months, top traders on the Shanghai Futures Exchange (SHFE) have resumed accumulating net positions, underscoring sustained Asian demand.
“Sustained interest in Silver has also been evident, particularly from Chinese traders who added approximately 20,000 SHFE lots to their net position in July,” McKay added, highlighting Silver’s surge in recent weeks.
The outlook suggests that Asian demand for both Gold and Silver is poised to remain robust amid prevailing market conditions.
