Written Commentary
GOLD / SILVER
With a slight recovery in the US dollar, slightly higher US treasury yields and a good measure of risk off flowing from commodities and global equities, the gold market looks to have technical and fundamental resistance at the $1800 level to start the new trading week. Like the gold market, the silver market also forged a downside extension and aggressive rejection/recovery of a sub $22.00 trade. It should also be noted that the $22.00 level has been very credible support since late September, with that level potentially a long-term value zone.
PALLADIUM / PLATINUM
While the PGM markets have not paid much attention to classic inflation signals (like CPI and PPI), this week could bring a key test of the focus of the markets following an avalanche of inflation reports. In other words, platinum and palladium have not shown a tight correlation with gold and silver prices, but that relationship might manifest itself later this week. While UBS sees a PGM price recovery in 2022, analysts there prefer platinum over palladium because of substitution of cheaper platinum for palladium.
COPPER
We continue to see the copper market caught in a trading range defined as $4.31 and $4.49 with that range enclosed by a larger range of $4.20 and at $4.53. In a limiting development Chinese copper production is expected to remain high with a month over month gain in December of 5.4% resulting in a net gain for the year of 1%. In fact, some traders are suggesting China could export some copper which in the current condition would likely shift copper prices back down toward the bottom of the consolidation channel.
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.
