According to TDS Senior Commodity Strategist Daniel Ghali, last session saw a surge in CTA buying activity that helped boost Platinum markets. However, there are now indications of buying exhaustion that could lead to a shift towards selling activity.
Potential for Palladium to Surge Higher
Ghali states, “Prices will need to reach $995/oz to prevent CTAs from reducing their recently acquired positions. A significant downtrend in the upcoming week could trigger substantial selling activity among CTAs, potentially amounting to -40% of their maximum size.”
Despite the looming threat of selling pressure, there are still scenarios that could result in continued buying activity from algorithmic trend followers. Nonetheless, the current flow dynamics suggest a strong downside risk.
On the other hand, the outlook for Palladium appears more favorable, with a potential for a significant uptick to stimulate extensive buying from algorithmic trend followers. Notably, discretionary traders have already taken substantial short positions, indicating a favorable setup for Palladium.
Overall, while Platinum markets face the risk of selling pressure due to buying exhaustion, Palladium shows promise for a significant uptrend that could attract strong buying activity from traders.