Precious Metals: Positive nuances to continue supporting prices – ANZ

Ample liquidity and negative real rates continue to support the precious metals sector. The investment demand for all metals has been strong. Gold looks relatively attractive after its recent underperformance against silver. Any price setback presents a buying opportunity, strategists at ANZ Bank inform.

Key quotes

“An unexpected rise in real yields was the spark that ignited a sell-off in gold prices recently. This saw ETF flows turn negative in August for the first time since June. Ample money supplies, record ETF flows and the weaker US dollar are the factors supporting robust investment demand. Nevertheless, there has been muted speculative interest in gold futures.”  

“Silver has unexpectedly outperformed gold, with the gold:silver ratio falling to 71x this month. Resilient demand from the electronics and solar sectors, along with supply disruptions in Latin America, have supported gains.”

“PGMs are getting investor attention, with rising net ETF inflows and coin sales. The auto sector is recovering – China being the first to see a growth in auto sales. Nevertheless, growth decelerated in recent weeks.”