Silver is a big momentum trade, says Jefferies' David Zervos

Summary

CNBC Power Lunch hosts a discussion with Sarat Sethi and David Zervos on metals, commodities, the dollar, and Fed policy. David Zervos calls silver a crowded hedge-fund momentum trade with fundamental support from central-bank gold buying, while Sarat Sethi sees commodities helped by dollar debasement and industrial demand and expects the dollar index to move lower. The segment also covers year-end tax-loss and short-covering interest in beaten-down names like Intel and Moderna, and David Zervos disagrees with calls for no more Fed rate cuts.

• Silver is described as a big hot-money momentum trade dominated by hedge funds, with risk of an aggressive unwind.
• Gold is seen as supported by central banks moving reserves after Russian assets were conscripted, with investors front-running that demand.
• Sarat Sethi says commodities gain from dollar debasement, inflation hedging, and industrial demand in copper, aluminum, and steel.
• Sarat Sethi expects the U.S. Dollar Index to break lower based on its chart pattern.
• Year-end tax-loss selling and short covering are cited as supports for beaten-down stocks including Intel and Moderna.
• David Zervos rejects the view that the Fed will stop cutting rates and possibly hike, pointing to labor-market softness and anchored inflation expectations.