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Metal Futures All Higher


With gold and silver prices adding to Friday’s strength it would appear as if some flight to quality buying is moving into the market ahead of the US election. Clearly, the unending infection spread in Europe is hovering over the precious metal markets and a deflationary wave of selling could be seen at any time if the US joins Europe in a wave of lockdowns. However, it should be noted that gold and silver prices are climbing against strength in the dollar for a 2nd straight session indicating a slight change of market focus.


While it would appear as if the palladium market has found some form of support at the $2,200 level, it should be noted that the washout last week was on heavy volume and little change in open interest and therefore fresh sellers might be offsetting some of the long liquidation. Additionally, big picture global (non-Chinese) macroeconomic forces should continue to apply pressure to palladium despite news that the Chinese long-term plan from last week provides significant stimulus which in turn should boost Chinese demand for palladium. Cushioning the platinum market is the likelihood that last week’s declines (after the COT report was measured) puts the net spec and fund long down to the lowest level since June 2019.


The copper market last week failed to benefit from a series of very positive long-term infrastructure spending goals released from the Chinese national leadership planning council and the market this morning hasn’t benefited definitively from better than expected Chinese manufacturing PMI readings for October. However, the copper market failed to benefit from a series of positive US scheduled data points last week probably because big picture election/infection issues continue to threaten near term physical demand views.

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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