GOLD / SILVER
With a softer start in the dollar, higher Hong Kong and Shanghai gold closes and hope for supportive Fed dialogue, the gold market should have a slightly positive fundamental track to start today. However, prices early on were tracking in negative territory despite overnight reports that a smaller but more likely to pass stimulus package is under fresh consideration in Washington and that shows the bulls lack some resolve. Even more surprising is the potential that gold and silver thrust higher yesterday following news of forward progress in the front-running virus vaccine. If the focus of the gold trade has shifted back toward classic physical fundamentals, we would expect prices to rally on increased trading volume again today.
PLATINUM / PALLADIUM
Tight coiling action continues in the palladium market this morning with the market showing very little (if any) positive reaction to Wednesday’s strong data and more optimistic overall environment. In fact, one might have expected more strength in palladium given the risk on environment was given an added boost by positive vaccine news. Interest in palladium ETF’s remains virtually non-existent following a decline in holdings yesterday which in turn leaves holdings 18% lower on the year. In October platinum, the bullish reaction to yesterday’s upbeat macro developments was a little more definitive but the net gain relative to the Tuesday close suggests there is not a lot of bullish interest poised to jump into the market.
In our opinion, the copper market was lifted yesterday by a rising tide of global macroeconomic optimism. With much stronger-than-expected US durable goods figures yesterday, this week’s sharp run up in equities, favorable vaccine news, ongoing declines in LME copper warehouse stocks, and renewed strength in other metals markets, copper should now have a strong foundation well above this week’s low of $2.9325.
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.