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Metals Futures Higher


As indicated already, the explosion in precious metals prices were the feature of the overnight trade, with a-number-of bullish arguments thought to be driving the complex higher. Apparently, the markets are of a mind that the solution to the US economic slowdown will be very elusive and that significant amounts of additional assistance will be needed as the world’s largest economy looks to have the longest battle against the virus.. Not surprisingly, investors also added to the bullish environment with news that Friday saw 1.76 million ounces purchased by gold ETF’s with a more astonishing purchase of 9.1 million ounces of silver by silver ETF’s.


With a tremendously strong/impressive finish last week and further impressive upside follow through this morning, the palladium contract appears to be poised to make a quick sprint back up to the $2500 level. However, we also think that the palladium market is poised to exhibit significantly more volatility than platinum, with the range on Friday of $104 becoming a common occurrence. However, the palladium market has a very minimal net spec and fund long (the COT positioning is probably understated due to the $120 rally after the report was measured. While the platinum market did not finish last week strong, we see the potential for $1,050 trade in the next several weeks


If US/Chinese relations were not on the rocks, we suspect that the overnight issuance of another Chinese scrap copper import quota would have served to lift copper prices. Certainly, the copper market should draft some support from a solid German IFO reading overnight but as is usually the case, the focus of the copper market is primarily locked onto the ebb and flow of the Chinese economy.

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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