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The dollar’s rise in response to the pinch of pain felt by global risk assets highlights that market sentiment may remain highly levered to price action as their causality works both ways, per TD Securities.

Key quotes

“Gold has held the highest beta to pandemic sentiment in our cross-asset framework, suggesting that a further deterioration in sentiment is can put a dent in the yellow metal.”

“We expect that gold will ultimately outperform, as the Fed’s massive QE program and the fiscal impulse will ultimately continue to suppress real rates.” 

“We expect marginal short covering in silver, but don’t expect much impact on price action with very minimal flow estimated.”