Written Commentary
COPPER
In a development that should disappoint the bull camp, copper prices this morning are trading lower despite an upward revision in IMF Chinese growth forecasts for this year and next! In fact, the copper market is also discounting a bullish forecast from RBC capital markets overnight which predicted copper will stay strong through the end of this year. The copper market managed to reject a retest of the vicinity of last week’s spike low yesterday giving rise to talk of a building consolidation low zone. The trade has certainly balanced a very oversold technical condition and has reduced a portion of its massive net spec and fund long increasing the potential for a technical low. On the other hand, Chinese domestic copper stocks remain high with a gain this year of 240% on a year-over-year basis, but that is offset by very strong Chinese daily refined copper production.
GOLD & SILVER
Global equity markets overnight were lower except for the markets in Shanghai which traded fractionally higher. However, bullish fundamental information on silver, justifies silver’s recent relative strength versus gold as reports of heavy Chinese buying of international silver suggests a major demand source has emerged. Apparently, the bullish theme behind significant Chinese interest is surging demand for silver in solar energy applications. Fortunately for the bull camp, the washout last week resulted in a significant 40,000 contracts drop in gold open interest on relatively active trading as that could increase the odds of a technical low.
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.
