Early-dip buyers of gold and silver are vulnerable but silver maintains cleaner positioning: TD Securities
(Kitco News) The positioning in both gold and silver is stabilizing but silver’s trading specs look cleaner in comparison to gold, according to TD Securities. “The sharp pullback in precious metals helped to sap out excess positioning from gold futures. Indeed, positioning data suggests that money managers substantially liquidated their gold futures length amid the pullback, placing the latest estimate of position size in line with expectations given the number of traders long,” TD Securities strategists write. “Silver continues to hold a substantially cleaner positioning slate, which mitigates this risk for the white metal.” Higher rates still pose a potential short-term headwind for gold. However, last week’s pullback revealed that massive appetite for precious metals is still intact. “Considering we still expect real rates to eventually resume their fall, should headwinds shift to tailwinds, we could see precious metals resume their upward trajectory with a substantial amount of strength. For now, the early-dip buyers still remain vulnerable, suggesting a deeper pullback could still be in the cards, but the headwinds are quickly fading,” the strategists add.