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Sideways Consolidation Needed in Metals


At least to start the Thursday trading session, outside market forces for gold and silver are supportive with the dollar lower, treasury prices higher and general strength in most physical commodity markets. However, we see the prevailing trend in gold and silver remaining down as the chatter about tapering continues to flood the headlines daily and more importantly there are signs the Chinese economy is slowing from delta, energy shortages and or increased Chinese government regulation.


After a fresh failure yesterday and a multi-quarter low the palladium market has bounced and continues to build open interest while building a consolidation pattern and therefore the market may be attempting to find a bottom. The downside breakout in palladium yesterday provided the brunt of the selling pressure in platinum and palladium could continue to “drag” platinum lower in the event it breaks out down again.


In addition to a normal corrective track, copper remains under serious demand destruction fears from events in China. As indicated earlier this week, China is suffering energy shortages and has idled industrial facilities which in turn should reduce economic activity and logically spark fears of lower copper consumption.

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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