Gold and silver began the week with gains despite the rising number of coronavirus cases across the U.S. and the possibility of more shutdowns, says TD Securities. “Precious metals have started the week on the front foot, despite growing fears of renewed stay at home orders in major US cities, most recently being Los Angeles,” the bank’s strategists write.

“As we have witnessed in the past, gold does not hedge against a deflationary shock such as the virus, but so far inflation expectations have managed to hold firm in face of the latest worries.”

The precious metals’ main drivers going forward remain sinking yields, low real rates, and continued mass stimulus and liquidity. “We expect that these common drivers will continue to drive capital to shelter itself from negative real yields in both risk assets and real assets, and therefore, we argue that money managers need not be concerned about trading gold in a risk-on environment,” the strategists add.