Precious metals prices have recovered strongly of late. This is hardly surprising given that commodities generally are seeing their strongest rally since 2011. Everywhere you look, raw material prices have surged, both industrial and non-industrial. Dollar weakness amplifies the picture somewhat, with the benchmark DXY index slipping below 90 this week, a roughly 10% decline over the past year.
Surprisingly in this context, precious metals prices have done poorly relative to other commodity groups. There are three explanations for this, which also help explain the recent reversal and apparent breakout in gold and silver.
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