As Platinum Group Metals continue to rise, all eyes are on Palladium, according to TDS Senior Commodity Strategist Daniel Ghali.
Potential Unwinding of Short Positions
Analysts are closely monitoring the possibility of short positions being unwound, especially as CTAs hold a large net short position that could be completely unwound if prices continue to climb. This poses a significant risk to algo positions, particularly in Palladium. Discretionary traders have also reaccumulated their significant net short position in recent months.
There is a concern that a squeeze on CTA positioning could escalate into a squeeze on discretionary positions. Despite this risk, discretionary traders have managed to endure similar situations in the past.
Analysis and Implications for Investors
Platinum Group Metals, especially Palladium, are experiencing a surge in prices, which could lead to the unwinding of short positions held by CTAs and discretionary traders. This potential squeeze on positions could have significant implications for the market and investors.
Investors should stay informed about the latest developments in Platinum Group Metals and monitor the market closely to make well-informed decisions about their investments.