October 23, 2011 10:53:31
LONDON (Commodity Online): In the absence of strong investment demand, silver’s weak fundamentals expose prices to the downside, said Barclays in a briefing. However, the bank has retained positive outlook on gold.
“We continue to expect gold prices to be cushioned amid the seasonally strong period for demand and remain key before investment demand returns to the driver’s seat. We retain our positive view on gold given the macro backdrop, but risk aversion and the need for liquidity are likely to set the tone of trading in the near term.” the bank said.
Physically backed palladium ETP holdings have exacerbated the downside in prices, led by the deterioration in the demand outlook. Although PGM demand looks softer, the supply side remains more vulnerable in light of lower prices.
Prices of precious metals have struggled to extend their gains as uncertainty about Europe persists and market confidence remains fragile. However, gold investor interest has stabilised, and physical demand continues to emerge, albeit at softer levels.