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Corrective Action For Palladium

GOLD / SILVER

With an upside breakout in the dollar index overnight, fresh new lows for the move in gold and silver prices are not surprising. In addition to pressure from strengthening dollar action, the gold market is also pressured further by a World Gold Council paper suggesting that Chinese gold interest in the first part of 2022 will be softer due to lockdowns and a slowing economy.

PALLDIUM / PLATINUM

Not surprisingly, the palladium market is showing some badly needed corrective action today with the market yesterday barely forging a higher high for the move. On the other hand, this week’s rally was forged on a significant jump in trading volume, indicating prices have not reached level deemed to be excessive by a moderate portion of the trade. The palladium market discounted a Reuters’ poll suggesting a rotation from expensive palladium into cheaper platinum will be seen over the coming 2 years. In the near term, it is possible that palladium will see its premium to platinum rise above $1,500 an ounce thereby accelerating substitution.

COPPER

With a downside breakout to the lowest level since January 10th, the copper market has flipped the short-term trend to the downside. Unfortunately for the bull camp weekly Shanghai copper stocks increased by 5,257 tons more than offsetting the daily declines in LME copper warehouse stocks seen this week. In other minor negatives, UBS overnight lowered copper and aluminum price forecasts, while Japan noted a 1.6% year-over-year drop in copper exports.

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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