Precious Metals complex is in vogue – TD Securities

According to analysts at TD Securities, the precious metals complex is in vogue following a wave of monetary easing, including from three Asian central banks overnight, which is fuelling demand for global safe assets.

Key Quotes

“The yield on 10-year Japanese sovereign bonds fell to as low as -0.215%, below the Bank of Japan's preferred range, highlight global money managers' insatiable thirst for safe haven assets in the current macroeconomic context. As far as we are concerned, we continue to see asymmetry in gold prices as the market calls Chair Powell's bluff to deliver "mid-cycle cuts", as opposed to a full-blown easing cycle, and as the likelihood of a currency war rises.”

“The yellow metal's convexity related to its zero-coupon nature and uber-long duration are other reasons why we think prices may still have room to rise. At the same time, China (among other central banks) has continued to grow its gold holdings, as its reserves are said to rise for an eighth consecutive month in July.”