Speculation in Platinum, Palladium Remains High

27 Oct 2010 • by Natalie Aster

Risk appetite remains in place. Despite US equities closing lower, commodities remain well supported. The futures market indicates that US equities could push higher today.

Precious metals remain well supported. While gold is still meeting strong resistance on approach of $1,070, we are seeing much better support than we did in the physical market (refer to Focus). Combined with the dollar weakness, which gold has largely ignored last week, gold could retest the $1,070 level soon. Our overall strategy: buy price dips in gold. Gold support is at $1,050 and $1,040, and resistance at $1,064 and $1,075.

Speculative length for platinum and palladium remains high, and while it is of some concern, we believe the large speculative component remains sustainable. However, investors might be reluctant to add new positions without gold pushing higher.

Platinum support is still at $1,350 and resistance at $1,370. Palladium support is at $330 and resistance at $335. Silver failed to rally despite strong support for base metals. The metal remains range-bound between $17.00 and $18.00. Silver support is at $17.30 and $17.00, while resistance is at $17.85 and $18.15.

Commodity Online

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