NEW YORK (Scrap Register): In its 2018 Global Outlook, TD Securities said its trade recommendation for next year is to go long silver with a price target at $20 an ounce, which is more than a 17% gain from current prices.
Silver will be the precious metal to watch next year, according to commodity analysts at TD Securities.
The Canadian bank is also bullish on gold in 2018, but given silver’s higher volatility, they see more potential with the grey metal.
“Underperforming silver is set to shine as gold improves amid still low real rates, firm demand, weak supply and higher volatility,” they said.
For silver, the bank sees prices averaging $18.50 an ounce in the first and second quarter, with the average rising to $19.25 in the third and fourth quarter.
December silver futures last traded at $17.065 an ounce, relatively flat on the day; at the same time, December gold futures last traded at $1,282.70 an ounce, up 0.30% on the day.
The analysts provide several bullish factors in support of a precious metals rally next year, including a weaker U.S. dollar and fewer U.S. interest rate hikes.
TD Securities also sees potential for gold and silver to shine as equity markets start to look fragile.
“With equities in record territory and pricing in both low rates and earnings perfection, there will be a growing constituency who believe that there is more downside than upside risk. This historically has meant that investors beef up gold and precious metals exposure as a hedge,” they said.