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PGM Prices Weaker Overnight


Since yesterday there has been a migration to US Treasuries and the dollar on concerns over a global recession, which was triggered by a slew of disappointing economic data out of China and a surprise rate cut by the Chinese central bank. US data was disappointing as well, with declines in homebuilder confidence and New York state manufacturing. In contrast, BofA’s monthly survey of global fund managers reported that investor sentiment was still bearish but not “apocalyptically” so. FOMC minutes Wednesday will give a clue on Fed sentiment for the expected rate hike in September.


PGM prices were weaker overnight, with September palladium trading to Monday’s low and October platinum extending to the downside. These markets are feeling the same pressure that gold and silver are, with concerns about a global recession, a stronger dollar, and renewed expectations that the Fed will raise rates aggressively next month making it less attractive to hold any precious metal. Yesterday’s disappointing Chinese economic data raised concerns about auto demand, computer chip production, and the demand for auto catalysts like palladium and platinum.

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While copper saw significant downside follow-through from Friday’s negative reversal yesterday, the market managed to climb well above its midsession lows late in the session and was grinding out a mild gain overnight. In addition to a sluggish Chinese industrial production reading, several other economic data from China on Monday signaled a pullback in the property sector. This hurts copper demand prospects for China and could have a negative impact on global demand as well.

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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