Written Commentary
GOLD & SILVER
While gold and silver should draft support from positive Chinese economic data released overnight, we leave the edge with the bear camp. However, support at the $2000 level could be solidified by reports overnight that within the sharper than expected jump in Chinese retail sales were signs of increasing interest in gold jewelry. While the trade blamed the washout in gold and silver prices yesterday on the strength in the dollar, we think the markets are simply experiencing a gradual draining of speculative long interest from the very sharp March and April rallies. In retrospect, gold and silver traders were likely disappointed with clear evidence of a moderation of global inflation.
PALLADIUM & PLATINUM
While the platinum market seemed to lose upside momentum and outside market pressure from weaker gold and a stronger dollar yesterday dented sentiment, we expect the market to favor the upside today after signs of strong investor demand and favorable Chinese economic data. On the other hand, with palladium prices exploding and platinum prices posting only minimal gains, it is possible that leadership within the PGM complex has shifted. On the other hand, it is also possible that relative strength in palladium this week is the result of long platinum short palladium spread liquidation.
COPPER
While the copper market respected its 50-day moving average yesterday and again this morning at $4.0485, the market discounted a wave of positive Chinese demand news yesterday and again today. In addition to a Chinese liquidity injection yesterday, the trade also saw a sharp jump in Chinese new home prices providing fresh hope of a recovery in China. Furthermore, overnight Chinese economic data from retail sales and industrial production showed improvement from prior readings and should add to evolving optimistic Chinese copper demand views. In a very minor supply-side support Kazakhstan first quarter refined copper output declined by 14.5% versus last year.
Interested in more futures markets? Explore our Market Dashboards here.
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.
