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Favorable India Demand Underpins Prices


The gold and silver charts remain supportive of the bull case with uptrend channel support lines respected and higher lows more of a rule than exception. The gold market this morning is locked into a tight range because of thin holiday conditions, a lack of movement in the dollar and because of opposing fundamental headline developments overnight. On the negative side of the ledger, Chinese November net gold imports through Hong Kong declined by roughly 10% versus October and reached a 6-month low. On the positive side of the equation, Indian gold jewelry retailers are projected to see revenues jump by as much as 25% this fiscal year reportedly because of rising disposable incomes and pent-up demand from the Covid period.


While palladium continued to exhibit significant volatility yesterday (daily ranges this week have been $85 and $90), a decline in open interest on Tuesday could be a sign that shorts are banking profits ahead of year end. While it will take consistent inflows to platinum ETF instruments to signal a return of investors to platinum, yesterday platinum ETF holdings saw a noted inflow of 14,131 ounces bringing total ETF holdings above 3 million ounces worth $3.06 billion.


In addition to a modest breakdown on the charts early today, the copper market is under pressure from a large inflow to LME copper warehouse stocks and from rising demand fears from China because of the potential for economic turmoil from surging Covid cases following the loosening of activity restrictions. Keep in mind, to start the trading week copper forged a spike up move off the unwinding of Chinese activity restrictions and those policies are largely thought to be the cause of the massive spike in daily infection counts. It should be noted that iron ore prices in China continue to surge (six-month highs) off optimism over demand prospects in the world’s largest steel producing country.

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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