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TD Securities’ commodity demand indicator finally records a noteworthy improvement and suggests it has become a tailwind for silver. Credit Suisse’s strategists see the precious metal testing multi-year highs.

Key quotes

“A simple analysis extracting the (rolling) regression coefficient of silver’s returns as a function of gold’s and our commodity demand indicator suggested that silver has increasingly been driven by commodity demand.” 

“Silver ETF holdings have been highly correlated to gold’s of late — suggesting investment demand for the precious metals theme is also flowing to silver.” 

“Inasmuch as commodity demand continues to firm, the context of rising investment flows in precious metals, combined with rising commodity demand, creates the set-up for explosive performance — particularly considering the constrained supply-side and low speculative interest.”