Latest surge in precious metals prices was presumably supported by speculative buying. Thus, the sector faces considerable setback potential, strategists at Commerzbank report.
Potential for further gains could be limited
“The surge in precious metals prices to multi-month highs that has been observed since early November is likely to have been driven by speculative buying.”
“The potential for further gains will be limited if speculative financial investors rethink their recently optimistic attitude towards precious metals given the prospect of more pronounced interest rate hikes next year.
“If previous long positions were to be liquidated or new short positions built up, prices could even face considerable setback potential.”
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