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PGM Market Staked Through Volatility


With the gold market only temporarily extending the July and August rallies in the wake of yesterday’s softer than expected US CPI reading, (all CPI component readings registered softer inflation) and the October contract settling back below $1,800, the bounce has stalled. While the dollar is slightly supportive with the index sitting just above yesterday’s low this morning, but hawkish dialogue from the Fed’s Kashkari overnight has put gold and silver on a back foot to start today. Apparently, the Minneapolis Federal Reserve bank president reiterated the likelihood of a long inflation battle ahead and indicated the US economy could be in recession soon.

Metal bars


In retrospect, the PGM markets skated through the financial market volatility yesterday and seem to have come through the event with a positive track. Adding into the bullish tilt is news overnight that South African June PGM production declined by 9.8% on a year over year basis. Like gold and silver, palladium and platinum ETF holdings have continued to decline persistently in a sign that small investor interest in the PGM’s remains very poor.


With two new and major Chinese lockdowns announced this week, the bull camp in copper is very fortunate to see distinct improvement in the overall global economic environment following softer US inflation data yesterday. Certainly, China is a dominating force in the copper market, but the US economy is also a key driver of the global economy, and the US economy could now become a cushion for copper against recession in Europe and ongoing Covid issues in China.

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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