Page 30 - Bullion World Issue 3 July 2021

Bullion World | Issue 03 | July 2021

Mr. Bart Malek, Head of Commodity
Strategy, TD Securities
Silver

I think there is place for Silver and Gold
in precious metals in porfolios as they are
very good stablizers, they have performed
very well in this cycle and previous cycle when we were hit by

As per the subtitle, after a period of underperformance Silver is
getting its Bona-Fides back. It is looking much better and there
is hope that it will do better in the next twelve months. You can
see silver to add 30$ in sometime in between that period. Silver
is roughly double the volatility of Gold. That typically means
that, when Gold does poorly, Silver does really poor too. And
once when the precious metals environment is conducive for
high gold prices, Silver outperforms. And that exactly is what
we have seen just to give you a case in point. During the debts
of financial crisis we had massive liquidity issue even in the
treasury market. Silver dropped significantly more than Gold.
We hit the mark of 11$ or so, certainly underperforming Gold
that time. Gold to silver price ratio peaked to its highest at 124.

• Fabricators indicate that ‘slow’ Pt for Pd substitution in
gasoline LVs already on sale could be c.150 koz in 2021
rising to 1.5 moz in 2025
• Substitution in c.31m new gasoline cars in China and
Europe that had to meet China 6a and Euro 6d by January
2021 could add c.400koz per annum – automaker savings
c.$500m/year
• Investors are starting to react to the market deficits that
this is likely to drive

Source: ChinaAutoInformation.net, OICA, LMC, Bloomberg, WPIC
Research

In summary, platinum is witnessing significant demand growth
with constraint in supply. There is significant strategic role for
platinum in hydrogen economy. Short and long term platinium
outlook driving significant additional investment demand more
relevant than ever to price discovery.

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