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Metals Gain on China Unrest

GOLD & SILVER

Unrest in China over Covid lockdowns seemed to provide gold and silver with a bit of a lift overnight, but so did a weaker dollar. The markets were bailed out last week by weakness in the US dollar, but the bull camp could be disappointed with the lack of reaction to signs of a less aggressive US Federal Reserve. Unfortunately for the bull camp, Indian gold imports were reported to have declined in October with Indian officials also reporting a 17.38% decline of imports in the April through October timeframe (relative to year prior figures).

fine gold bars

PALLADIUM & PLATINUM

With the big range down failure in December palladium briefly pushing prices below the psychologically important $1,800 level Friday, the bear camp has control to start the new trading week. Despite recent upbeat global auto sales forecasts, the perpetual extension of Chinese Covid restrictions cast significant doubt on a recovery in PGM demand for auto catalyst production, and the growing unrest in China over the issue raises additional concerns. Unlike palladium, platinum sits very high in the past eight months’ trading range and is facing suspect physical and investment demand prospects.

COPPER

Copper has started out the week under pressure, but it has already posted a sharp rebound after trading to its lowest level in more than three weeks overnight. The protests in China have been a source of pressure, as that does not bode well for the near-term demand outlook. While the market has managed to claw up and away from last week’s spike low for a second time, ongoing Covid infection concerns in China create a significant layer of fundamental resistance around the $3.70 level.

 

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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