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TDS: rally in industrial precious metals 'could have some legs'

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(Kitco News) - Precious metals with heavy industrial applications – like silver and platinum – could “have some legs” to run ahead, said TD Securities. For now, much of the activity in the precious complex has been position squaring, with gold supported by strong exchange-traded-fund buying but participation from money managers and hedge funds still lower than might be expected in a bull market, analysts said. “In fact, amid stronger risk sentiment, gold is struggling to break out to new highs as a reversal in safe-haven flows place a cap on prices,” TDS said. “That being said, inasmuch as commodity demand continues to firm, we suspect that silver's industrial component, in combination with continued investment flows, could be creating a set-up for explosive performance. Similarly, platinum could also benefit from the same factors, and we note that in the immediate term, we expect a CTA [commodity trading adviser) buying program to lend further support to the metal. In this context, the rally in the industrial precious-metals could have some legs.” As of 8:17 a.m. EDT, Comex June gold was $7.60 softer to $1,727.90an ounce, while July silver was 20.7 cents stronger to $17.90, July platinum was $14.20 higher to $900.50 and September palladium was $17.30 higher to $1,993.10 an ounce.

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