Silver prices are surging. However, strategists at TD Securities note that XAG/USD needs to surpass the $22.60 mark to alleviate downside pressure. 

Explosive silver prices are reminiscent of a #silversqueeze2.0

“Our CTA Position tracker highlights that a break above $19.32 likely sparked a CTA buying program. As a result of the break, CTAs are set to cover ~10% of their maximum historical short, exacerbating upside flows with few participants taking the other side.”

“We estimate that prices would need to breach $22.60 to catalyze additional CTA buying, suggesting that the #silversqueeze2.0 won't see much follow through.”

“We expect another beat on this week's nonfarm payroll data on Friday, which could present be a catalyst for a repricing lower.”