PLATINUM / PALLADIUM
While it is very difficult to confirm, it is possible that palladium is once again being seen as an attractive alternative to gold considering its general precious metals classification. However, it is more likely that palladium is being lifted because the ongoing recovery in China is starting to foster chatter than Chinese auto sales have turned up thereby increasing auto catalyst demand. Platinum should also catch some minor lift from a threat against South African production because of the potential for power issues. The primary South African electric provider has not invoked brownouts and blackouts yet, but it would appear as if the company has warned of problems.
GOLD / SILVER
While gold and silver prices did not benefit from the massive washout in US equity markets yesterday there would appear to be some flow into gold this morning because of signs of additional selling in equities from Asia. However gold and silver are likely benefiting early on from signs that the dollar rally is fizzling. If there is a primary supportive overnight development it is news that Indian gold imports in August expanded to 35.5 tons which is 10 tons above the prior month and nearly triple the low water mark of imports of 14.8 tons earlier this year.
While the copper market has held above yesterday’s spike low washout this morning the overnight headlines are not particularly supportive of the bull case. Certainly, there continues to be talk of ongoing economic recovery in China which in turn should keep copper demand strong but seeing a weekly Shanghai copper warehouse stock build with a flow of 6787 tons on the week isn’t exactly what the bull camp had hoped for. Nonetheless, world exchange stocks of copper remain supportive of prices with LME copper warehouse stocks approaching 15-Year lows.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.