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Gold may not benefit from CTA buying yet; Palladium interest fade

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NEW YORK (Scrap Register): Commodity Trading Advisers are not rushing into gold yet even though the metal rose as the U.S. dollar eased after midterm congressional elections, said TDS.

There is a risk of CTA selling of palladium, however, the firm added. The most active December gold contract on the COMEX division of the New York Mercantile Exchange advanced by $2.40 to settle at $1,228.70 an ounce on Wednesday, with prices recouping a portion of the 0.5% loss they saw Tuesday.

“While the market will likely continue to assess the potential market impact of the midterms, we suspect that precious-metal buyers will not receive any substantial support from CTAs [Commodity Trading Advisers] for the time being,” TDS added.

“We estimate that CTA buying interest in palladium is fading, and are keeping a close eye on the $1,070 an ounce range as a break below would imply substantial flow to the downside,” TDS noted.

In contrast, CTAs could turn to modest buyers in sister-metal platinum should prices break the $900 an ounce range as momentum signals reverse.

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