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In the view of Harry Tchilinguirian, a Senior Commodity Economist at BNP Paribas, Silver is likely to outshine gold in the balance of the year, helped by continuing exchange traded fund (ETF) flows into the white metal.

Key quotes (via Kitco)

“With gold hitting new nominal highs, investor demand has, we believe, switched to silver as a cheaper alternative to hedge macro risk through precious metals.”

“ETF flows into gold have leveled off in August while continuing to modestly move higher in silver.”

“See more potential for silver in the near-term.” 

“With Fed policy to stay accommodative and realized inflation to rise in 2021, we could see real rates fall further, and by extension fuel another gold rally.”

“Expect some yield curve control program to be announced in September. This will keep pressure on the US dollar.”

“The Fed will keep its policy rate at the effective lower bound (ELB) and pursue the expansion of its balance sheet until it is confident the economy and inflation is back on track. Consequently, the US no longer possesses a comparative advantage in yield that helped prop the dollar earlier this year.”

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