Written Commentary
GOLD & SILVER
With a broad-based risk off environment thrown off by equities again and another contract high in the dollar index, outside market forces favor the bear camp in gold and silver. Unfortunately for the bull camp, the dollar’s dominance is broad-based insinuating a sustainable uptrend. Obviously, the strength in the dollar is the direct result of a global rate hike environment which in turn has fostered deflation, inflation, soft landing, recession, and some residual inflation expectations, but apparently the gold market does not see the uncertainty lifting flight to quality buying.
PALLADIUM & PLATINUM
The palladium market continues to maintain bullish resiliency with a sharply lower track early yesterday reject with a retest of psychological resistance of $2,200. As indicated yesterday, the palladium market remained net spec and fund short near record levels thereby likely contributing short covering buying into the trade. While we have not seen evidence of disrupted supply flow from Russia and or South Africa, supply issues are more credible than hope for improved physical and/or jewelry demand. The platinum market appeared to overextend itself at the end of last week particularly with classic supportive fundamentals not apparent to this analyst.
COPPER
The trend remains down in copper despite recent attempts to track within a consolidation bound by $3.2730 on the downside and $3.58 the upside. However, media reports suggest hedge funds continue to turn more bearish which is not surprising given the trades expanding probability of recession. In our opinion, copper prices yesterday would have been sharply lower given the definitive outside market risk off vibe, but evidence of lower production from Chile and Peru likely discouraged some sellers.
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.
