Increased market volatility raises the Value at Risk (VAR) for trading positions. For systematic funds like CTAs that use VAR-based position sizing, this can automatically force them to reduce holdings to maintain risk targets, adding selling pressure that is independent of fundamental views.
Despite recent price volatility, the firm maintains a bullish outlook on gold. They believe fundamental drivers, including 800 tons of expected central bank purchasing and 580 tons of ETF inflows for the year, are strong enough to push prices to new highs, making dips an attractive entry point.
Retail investor frenzies have a disproportionately large impact on silver prices because its market is significantly smaller than gold's—about one-tenth the physical size. This small scale allows rushes of retail capital to create sharp price movements that would not affect the more liquid gold market as severely.