Gold, Silver Continue Wild Swings

Summary

Wasif Latif of Sarmaya Partners discusses the sharp volatility in gold and silver, calling the selloff a healthy correction within a longer-term secular bull market for precious metals and broader commodities. He remains overweight gold, silver and their miners but has begun reallocating toward energy, which he expects could be the bigger play over the next year. He also says the U.S. dollar bear market remains intact despite a near-term rebound tied to the Fed nomination, with risks of short-term dollar strength on flight-to-safety flows.

• Gold and silver saw extreme volatility, spiking and then sharply reversing.
• Wasif Latif views the pullback as a healthy correction in a secular bull market.
• Sarmaya remains overweight gold, silver and mining companies due to geopolitical and fiscal risks.
• The firm has trimmed precious metals to reallocate toward energy and oil and gas companies.
• Latif expects energy may be the bigger play over the next year or in the second half.
• He sees a multi-year commodity supercycle broadening into industrial metals.
• He believes the dollar bear market is intact despite a near-term rebound.
• He warns a short-term dollar rebound could occur on economic slowdown or safety flows.