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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Horgad who wrote (163219)

10/4/2020 9:37:29 PM

From: TobagoJack

Read Replies (1) | Respond to of 218670

In the meantime, all four metals seems good-enough

Global Research
02 October 2020

Global Precious Metals Comment

Underlying views unchanged

We remain positive on gold and expect to see spillover interest in silver and platinum. Palladium market remains tight but conditions to ease medium term.

Read the Report

Joni Teves, Strategist
joni.teves@ubs.com
+65 6495 6851

Diversification to drive gold strength
We maintain a positive view on gold, expecting prices to recover in Q4 from the recent set back below $1900 and see further strength especially into the first half of 2021. The journey higher is unlikely to be straightforward – periods of yields backing up and bouts of dollar strength should create headwinds along the way. However, we think gold's attractiveness as a portfolio diversifier should ultimately offset these risks as long as broader macroeconomic conditions remain intact. Strategic gold allocations still have room to grow especially as the investor base expands and gold is increasingly being viewed as an alternative to bonds.

Silver finds support from retail interest
We expect silver to continue taking its cues from gold amid a lack of its own fundamental story. Strong conviction in gold upside is likely to encourage investors to express positions in silver as well given the strong positive correlation between the two metals. Strong inflows into ETFs and the relative resilience of these holdings suggests that there is also some retail interest that is more long-term in nature. Bargain hunting and interest in silver as a cheaper way to express gold upside are likely to continue being key sources of support.

Platinum's move higher is likely to be gradual
We continue to expect platinum prices to trend higher gradually helped by stronger gold and improving fundamentals in the medium term. Investment interest in platinum has been a key source of support for the market this year, offsetting the weakness in automotive and industrial demand. Combined with the disruption to both primary and secondary supply, this means that the platinum market is likely to be in deficit this year, a notable change from our expectations at the start of 2020. This variance in forecast highlights the extent of the uncertainty created by the COVID-19 crisis which has had significant impact on both demand and supply.

Palladium market remains tight but conditions should ease medium term
Despite the volatility and uncertainty brought about by the COVID19 crisis, palladium's robust fundamentals continue to underpin the market. We see prices strengthening and remaining elevated into H1 next year as the market remains supported by fundamentals. However, over a 12-18 month timeframe we would start to turn cautious given expected growth in supply and a slowdown in demand that is likely to start weighing on the market.