Precious Metals: Navigating Volatility

July 13, 2022 - 2 Minutes
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After ranking highly in several categories in the 2022 Commodity Rankings by earlier this year, we recognize that this honour carries a high level of significance because the ranking is voted on solely by market participants rather than industry bodies.

"I think this year, we differentiated from our peers in the industry by being present and being consistent with our customers during periods of high volatility and market disruptions," says Andrew Green, Managing Director, TD Securities. "We have built, developed and sustained an operationally sound business, offering customers a full-service experience including sourcing, financing and hedging of physical material and derivatives in all base and precious metals."

Providing the macro picture

The key with volatility in the commodity space is that it can be unique to one metal or commodity and therefore can be persistent, such as micro forces driving the supply, or demand of that particular underlying. As we have experienced with oil, palladium and more recently, with nickel, the commodity markets can be dislocated for periods of time. This is where experienced teams with historical track records of maintaining customer needs and requirements are necessary.

Commodities have added factors in that many industrial metals are produced in regions affected by the Ukraine conflict. Additionally, many metals are impacted by the carbon reduction programmes and ESG themes that have resonated throughout the globe in recent years.

The heightened volatility in the macro environment only emphasizes the requirement for regular hedging for producers looking to lock in higher prices above the cost of production, consumers looking to hedge future price exposure, or physical traders looking to source and finance material for their customers.

Connecting the players with solutions that matter

Being a market leader in this space allows for competitive pricing, consistency and the experience to deliver a full product suite to our clients. Our focus is on tier one corporate, institutional and sovereign clients in the metals market. We have a team of very experienced individuals across North America, Europe and Asia to service client requirements. We hold precious inventory in safe storage facilities worldwide and provide hedging solutions and the sourcing of London Metal Exchange (LME) material from all LME warehouses globally.

"We source physical material globally, offer transitory finance of inventory and offer customers hedging facilities in base and precious metals from derivative products to leasing of precious metals," says Andrew Green, Managing Director, TD Securities. "We offer a variety of hedging products and can provide consumer clients with products they wish to obtain pricing exposure to in the future -- whether that be in aluminium for the manufacture of automobiles or copper in the manufacture of cables or a producer looking to hedge their future metal production."

Our firm connects Canadian and multinational producers with a network of global refiners and consumers of metals, and metals products, through trading desks in Singapore, the United Kingdom and the United States to suit the hedging needs from clients in different regions.
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