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Precious Metals Support From Currencies


With the dollar extending last week’s reversal/slide and reaching the lowest level since August 26th this morning the precious metal markets clearly start the week with support from currency market action. In our opinion, the markets this morning are upbeat in anticipation of evidence on Tuesday that US inflation might be coming under control. In other words, both commodities and equities are hopeful that jumbo rate hikes from the US Fed are over or will be over after next week’s FOMC meeting. In fact, metals, equities, and other commodities are tracking positive today despite the promise of more quantitative tightening from the European Central Bank.

Stacked Gold Bars


Like other precious metal and commodity markets, the palladium market has extended last week’s impressive recovery rally and has matched the highest price since August 26th in the overnight action. While the PGM markets have not tracked tightly with the ebb and flow of fears of slowing from aggressive global central bank action, the markets this morning are obviously taking part in what appears to be an interest rate relief rally ahead of extremely critical US inflation data tomorrow. Platinum and palladium might have drafted some support from news that London will improve its traceability of PGM supply beginning January 1st with specific bar markings which could reduce Russian PGM supply flow to the world market.


Given the weekend announcement of spreading lockdowns in China (2 more major cities) the strength in December copper this morning could be a signal that copper prices down at $3.40 represent fundamental value. Like other physical commodity markets, the copper market charts have shifted in favor of the bull camp and have managed that action despite an increase in LME copper warehouse stocks last Friday, residual Chinese slowing fears and, in the face, lingering fear of slumping Chinese copper demand.

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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