Written Commentary
GOLD / SILVER
The precious metals markets are staying clear of their recent lows, but they are having trouble regaining upside momentum, even with the late rebound in global risk sentiment yesterday. They may have to wait until the FOMC meeting is out of the way before they can make a recovery move. Both gold and silver were able to rebound from heavy early losses yesterday, but they could not hold onto those gains and finished in negative territory. The prospects for a 75-basis-point rate hike at Wednesday’s FOMC meeting continue to weigh on the markets, but the chances for a 100-basis point hike appear to be receding. At this point, the chances remain for three more rate hikes this year, and that has made it difficult for gold and silver to sustain upside momentum.
PALLADIUM / PLATINUM
It’s possible the PGMs could benefit from the rebound in global risk sentiment on ideas it would encourage light vehicle sales and paint a rosier picture for autocatalyst usage. The dollar’s inability to take continue to make new highs may spark a pullback in reaction to the FOMC meeting, which could help platinum and palladium maintain their recent upside momentum. The COT report showed both markets with generally balanced spec positions, and they could benefit from stronger global risk sentiment.
COPPER
Copper prices continue to see coiling price action, as they have given up early gains and have fallen back into negative territory this morning. The market was unable to fully benefit from Monday’s improvement in global risk sentiment, as it finished the day under minor pressure. A weaker than expected reading for Chinese foreign direct investment further eroded demand prospects and was an early source of pressure. There has been a second sizable build in LME copper stocks in as many days weighed on prices, but stock levels remain close to their five-month lows.
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.
