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Divergence Between Gold and Silver


The rally in gold yesterday was important from two different perspectives. Seeing gold rally in the face of strength in the Dollar suggests the market has-the-ability to stand up to at least one bearish force. More importantly, it is possible that gold signaled that some focus remains on to flight to quality conditions and therefore not physical demand prospects.


Seeing wild two-sided trading range activity in the prior 2 sessions certainly suggests the platinum market reached at least a temporary top. However, platinum ETF holdings continue to grow with yesterday’s inflow of 7,797 ounces putting total ETF holdings at 3.77 million and this year’s year-to-date gain at 13%. On the other hand, the palladium market last week clearly found some form of value zone with its slide below $2,250 and its quick rejection of that washout and managed that action on a jump in trading volume.


With a fresh 4-day low in March copper today and a record spec and fund long position likely forged again yesterday, some measure of technical corrective action is underway. However, soaring iron ore prices from surging Chinese demand and news that China is “haggling” over 1 billion tons of coal, clearly suggests the Chinese recovery is robust and that demand for copper and other commodities hould remain strong.


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.

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