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Metal Trade Extends Recent Bearishness


With the dollar poised for new contract highs, noted crude oil weakness and fresh definitive damage on the gold and silver charts, the trade extends recent bearishness into another trading session. At the risk of sounding redundant, the fear of higher rates from many global central banks remains a significant weight on the back of the gold and silver markets. In fact, as was seen yesterday, gold and silver fell precipitously despite a lower trade in the dollar and that suggests no single theme is predominant in the precious metal trade.

Gold bull & bear


Like gold and silver, the PGM markets face a long list of bearish fundamentals. With palladium ETF holdings down 16% year-to-date and platinum ETF holdings down 12% year-to-date investors are obviously uninterested in the PGM complex. Recently, upbeat views from US car dealer profits and reports of expanding chip supply were expected to ramp up auto production but with overall macroeconomic psychology deteriorating, the PGM markets are facing demand destruction just like most physical commodity markets.


Despite December copper into the low yesterday falling $0.25 from last week’s high, we doubt prices have factored in the potential of fresh lockdowns inside China. However, Chinese copper demand fears have been stoked overnight from a different source with Chinese raw material prices shrinking but shrinking less than anticipated. Evidence of vulnerable Chinese material prices surfaced overnight from a Bloomberg story predicting a very difficult road ahead for Chinese steel mills.

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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