Good afternoon you seem to be positive on gold in the medium term, and more cautious on silver: isn't it necessary to see strength in silver to be optimistic on gold, as silver is usually a beta-gold play?

Eoin Treacy's view

Thank you for this question which may be of interest to other subscribers. Generally speaking silver acts as a high beta version of gold. This is particularly true in a trending environment but is less of a factor in a range, as is currently the case. 

I do not know if the new fixing arrangement for silver has contributed to its recent weakness but I think it is getting more interesting as the $19 is approached. Gold is still trading mid-range with geopolitical risk buying counterbalanced by somewhat muted Asian buying, while ETF holdings are stable. 

Having been the worst performing stock market sector last year, gold shares have at least stopped going down and a number are on solid recovery trajectories. Their continued upside potential is now tied more to their respective all-in costs of production than any other single factor. Therefore they represent an additional high beta play on gold.