Platinum has more to lose than palladium – TDS
|Should demand expectations recover, palladium's short squeeze could be reignited. It could be set-up to notably benefit from a reversal in broad commodity demand sentiment, TDS Senior Commodity Strategist Daniel Ghali notes
A recovery in demand expectations may push Palladium higher
“Should commodity demand expectations continue to subside, a cluster of Commodity Trading Advisor (CTA) selling programs could be catalyzed, sparking selling activity that could total -55% of the algos' max size.”
“In contrast, should demand expectations recover, Palladium's short squeeze could be reignited. CTAs are effectively 'max short' and therefore unlikely to add to their size in Palladium, even in a big downtape, whereas a commensurate rally could force large-scale buying activity from trend-following algos.”
“Considering that discretionary traders also likely still hold a substantial net short position, Palladium could be set-up to notably benefit from a reversal in broad commodity demand sentiment. A tactical relative value play appears to be an efficient expression.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.