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Negative Start for Gold and Silver


The outlook for gold and silver is at least partially negative to start the trading week with a slight bounce in the dollar, news that the Chinese central bank held its gold reserves steady for yet another month and from a 2021 gold price forecast from J.P. Morgan. In fact, gold and silver failed to benefit from positive Chinese import export data and from Chinese central bank suggestions they were in no hurry to back off supporting their economy.


While the platinum market finished last week’s trade with a very aggressive range up move and that rally was forged on surging volume and open interest, the ability to follow through on the upside directly ahead is obviously dented by the early corrective action today. Given that last week’s sharp decline in palladium took place in the face of a big rally in platinum, it would appear as if spread action is behind palladium weakness and that the markets have begun to work off a historic palladium over platinum premium.


While the trend remains up in the copper market, news that Chinese November unwrought copper imports fell to a 6-month low and news that Chinese overall copper imports fell by 9.2% versus the previous month appears to have caught copper expensive on their charts. However, the market could garner some support from the fact that overall Chinese import/export data was positive, and the Chinese have indicated they are not considering any kind of tightening of policies yet.

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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