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PRECIOUS METALS' PULL BACKS SEEN AS AN OPPORTUNITY BY WFII

Precious metals have been shining brightly so far this year.

For example, the Invesco DB precious metals fund DBP.P has advanced more than 26% YTD. This puts precious metals well out front of commodities in general, as well as the S&P 500 index .SPX and fixed income.

Indeed, the FTSE/Core Commodity CRB total return index .TRCCRBTR has gained 4.6% in 2025 so far, while the SPX is up 6.4%. The iShares 20+ year Treasury bond ETF TLT.O is down 2.5%.

Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute (WFII), believes the main drivers behind strength in precious metals have been a sharp decline in the U.S. dollar, the uncertainty surrounding tariffs, and expectations for Fed rate cuts among some investors and concerns over higher inflation among others.

"While gold was the first to break out in 2025, silver, palladium, and platinum have all outperformed during the equity market recovery that started on April 7. Platinum has been the clear standout, but palladium and silver are also beating gold," writes Samana in a note.

Here is a rough recreation of Samana's chart showing gold going from leader to laggard:

According to Samana, markets first went from grappling with sharp increases in reciprocal tariffs and the possibility of a global economic slowdown to delays in tariff implementation and the potential for a flurry of trade frameworks being announced.

Second, Samana argues gold's initial thrust pushed businesses, such as jewelry makers, to cheaper substitutes such as platinum and silver.

Lastly, he says many of the non-gold precious metals have various industrial uses, such as silver in electronics and platinum and palladium in catalytic converters, which allowed them to benefit from improving economic sentiment.

Samana's bottom line is that "this broadening rally reinforces our favorable guidance on precious metals, and we think investors should consider using pullbacks to add exposure."

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

TIPTOE THROUGH THE TARIFFS: CPI AND EMPIRE STATE CLICK HERE

U.S. STOCKS MIXED AS THEY SORT OUT INFLATION DATA, EARNINGS CLICK HERE

ECONOMIC RISK OR POLITICAL POWER-UP - WHAT BRAZIL'S TARIFFS MEAN FOR LULA CLICK HERE

U.S. STOCK FUTURES CRAWL HIGHER AFTER LATEST CPI CLICK HERE

POSITIONING ENTERING NEUTRAL TERRITORY CLICK HERE

WATCH OUT FOR HISTORY REPEATING ITSELF IN AUGUST CLICK HERE

FOOTSIE TOPS 9000: "IT'S PARTY TIME" CLICK HERE

TECH LEADS ON NVIDIA HELP, TELCOS DOWN CLICK HERE

BEFORE THE BELL: EUROPEAN FUTURES UP, EARNINGS IN FOCUS CLICK HERE

US EARNINGS TO SHED LIGHT ON TARIFF IMPACT CLICK HERE