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(Kitco News) Highly bullish price action in gold and silver could be pointing to a new driver behind the upward move, according to TD Securities. “While market participants have noted that large stops behind the increase in volume are likely to have been triggered, consistent price action in both silver and gold suggests that an additional factor may have contributed to the strong recovery, “say TD Securities commodity strategists. “We have simultaneously observed a recent surge in China’s margin trading, which has rekindled memories of the explosion in margin trading during the 2015 equity market bubble. Given that such trading is often driven by trends, and the prevailing bullish narrative of precious metals, we raised the question of whether gold and silver prices benefited from the increasing participation of this cohort. ” Either way, silver is seeing a sharp increase in demand, as well as its safe-haven appeal, strategists say. “The resurgence and resistance in our demand readings are having a huge impact on silver prices. After all, silver is an explosive metal, ”they write. Meanwhile, gold continues to be driven by inflation expectations. “The yellow metal is operating in a pro-risk regime, as it goes from being a safe haven to an inflation hedge asset. We expect macro issues, that is, higher inflation expectations, to continue to support gold prices, at a time when rate volatility remains particularly low. “
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