Written Commentary
GOLD & SILVER
While a G7 decision over the weekend to ban Russian gold imports should provide support to gold prices, the trade is hesitant to factor tightening supply in the wake of the abject failure of the oil embargo. In other words, seeing G7 countries prohibit Russian gold imports likely means Russia will increase exports to other non-G7 countries with some of that supply ultimately flowing into G7 countries. About the most positive issue for silver is the market’s ability to rebound from a very significant washout last week.
PALLADIUM & PLATINUM
While it is possible that PGM prices could see support from the G7 move to ban the import of Russian gold, a specific ban on the import of Russian PGM is not looming. However, Western countries have not been able to halt the export of Russian oil which is obviously much more difficult to engineer given the bulk of supply to be moved. In fact, shipping PGM supply through 3rd parties into countries deciding to embargo Russian supply should be very easy especially when one considers how much monetary value can be transported in a single vehicle! Certainly, given the situation in Russia, the threat against supply cannot be totally discounted and therefore we see value at the $1,750 level on the charts. While the net spec and fund long position in platinum is not as oversold as the palladium market, we see the net spec and fund long adjusted to the low last Friday (a decline of $39) approaching zero!
COPPER
In addition to spreading global recession fear, the copper market remains under pressure because of severely damaged charts and news of a moderation of protests around a Chilean copper mine. While the copper market has not been concerned with supply flow throughout the month of June, seeing the Codelco Chairman reaffirm their annual production target of 1.7 million tons should discourage bottom picking.
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.
