Silver's right tail keeps getting fatter – TDS

FXStreet Team FXStreet

XAG/USD is currently attacking $28.00 as tailwinds in commodity demand are set to keep silver momentum tilted to the upside, Daniel Ghali, Commodity Strategist at TD Securities, reports.

Key quotes

“A sharp recovery in commodity demand, combined with spectacular investment demand have contributed to extraordinarily large gains, particularly as traders are disincentivized to sell their physical silver. Despite a sharp pullback in prices, speculative appetite has yet to be satisfied with retail flows still rising.”

“Speculative appetite has also flowed into levered ETFs, which have seen their AUM rise to their highest since 2012. While this highlights the surge in investment flows, it also impacts the market structure. Rebalancing needs for these products create 'negative gamma' in trader parlance, which exacerbates momentum. Synonymous to CTA flows, these products add length as prices rise.”

“Considering the outlook for silver remains positive, the negative gamma adds more fat to silver's right tail. The US Mint is attempting to double its output of silver Eagles to meet demand, while industrial demand continues to recover. The metal's clean positioning slate, rising demand and inventory constraints should maintain momentum to the upside.”

Author

FXStreet Team

FXStreet

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

XRP struggles around $1.40 despite institutional inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.