Silver prices have recaptured some ground against Gold this month, likely in relation to its recent underperformance relative to Gold, TDS macro analyst Daniel Ghali notes.

Silver's fundamentals remain on an improving trajectory

“We expect CTA selling activity in Silver markets over the next several sessions to challenge money managers participating in the 'catch-up' trade.”

“Silver prices have recaptured some ground against Gold this month, in line with the improving trends in commodity demand sentiment, supported by a combination of CTA buying activity and macro funds re-engaging in the white metal, likely in relation to its recent underperformance relative to Gold.”

“However, a low bar for a round of large-scale CTA selling activity could add pressure on the 'catch-up' trade in the near-term, with algos likely to sell up to -10% of their net length in Silver, even in an uptape. Under the hood, Silver's fundamentals have remained on an improving trajectory, with only a few speed bumps observed in our grandiose #silversqueeze thesis thus far this year.