Epic Net Short Position in Palladium – TDS

When Platinum Group Metals is on top, analysts watch Palladium, notes Daniel Ghali, senior commodities strategist at TDS.

Short positions may begin to unwind

“As a reminder, there are scenarios where the large net short position held by CTA could be almost completely written off if prices continue to rise in a large rally. These risks to algo positions are particularly acute in Palladium as we also see discretionary traders re-accumulating their epic net short position in recent months.”

“In this context, a tightening of CTA positioning could turn into a tightening of discretionary positions, even though we recognize that discretionary traders have so far been able to weather the pain in similar episodes in recent months.”