Silver likely to outperform Gold, Copper in Q4 2012: TD Securities
Thursday, 05 July 2012 | 00:00
Silver likely to outperform gold, copper, crude oil and platinum in fourth quarter (Q4) this year, said TD Securities (TDS) in a commodities briefing. TDS is the global wholesale banking arm of Toronto-Dominion Bank Financial Group.
Silver to eventually get a boost from an increasing probability of more aggressive Federal Reserve monetary policy, although the metal could run into more tough sledding in the meantime should there be renewed eurozone debt worries and disappointments about U.S. quantitative easing, TDS added.
According to BNP Paribas, "An improving macroeconomic outlook and high risk appetite should see silver outperform gold for most of H2’12 and 2013 although silver, like gold, remains vulnerable to waves of liquidation. As a result, the gold/silver ratio should decline to the low 40s by H2’13.”
TDS also noted that, silver has been held back by gold’s sideways action lately and an economic slowdown that has hurt expectations for industrial demand. Meanwhile, mine supply keeps rising.
“At least for now, hedge funds and other specs have likely moved into other investments as they currently hold one of the smallest net-long positions in eight years,” they added.
The firm continued that, “However, if we see the Fed get aggressive on the QE front, silver should rally robustly as investors use it to hedge again. We would expect a rapid spec build in Comex net longs and a big rise in silver ETPs (exchange-traded products).”
“The probability of additional Fed balance sheet action to increase as 2012 unfolds, with silver likely outperforming gold, copper, crude oil and platinum in Q4” TDS concluded.
As of 12:15 p.m. EDT, spot silver prices rose by 3.2 percent to $28.36 on Tuesday, tracking gold's gains. Prices remain near their 2012 lows, however, and are little changed so far this year.
Gold prices rose 1.5 percent to a two-week high on Tuesday, as signs of a slowing U.S. economy fuelled investors' expectation that central banks around the world will introduce new monetary stimulus.
Platinum rose by 1.8 percent to $1,474.75, while palladium was also up 3.9 percent at $594.24.
Source: Commodity online