Silver prices have regained some momentum against gold this month, likely a response to the metal’s recent underperformance relative to gold, according to TD Securities (TDS) macro analyst Daniel Ghali.
Ghali highlighted that silver’s fundamentals are on an upward trajectory, benefiting from a positive shift in commodity demand sentiment. “Silver prices have recaptured some ground against Gold, supported by a combination of Commodity Trading Advisors (CTA) buying activity and macro funds re-entering the white metal space,” Ghali explained. This trend, he suggests, reflects silver’s effort to catch up to gold’s stronger performance in recent months.
However, Ghali warned of potential challenges ahead. “The silver market faces the risk of a wave of CTA-driven selling, which could put pressure on the ‘catch-up’ trade,” he noted. Ghali explained that algorithmic traders may sell up to 10% of their net positions in silver, even in an upward market trend, which could disrupt silver’s progress.
Despite these short-term risks, Ghali remains optimistic about silver’s broader outlook, emphasizing that its fundamentals remain strong. He acknowledged a few “speed bumps” but maintained confidence in the larger “silversqueeze” narrative that has bolstered the metal’s prospects this year.
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