Platinum prices have already printed their local lows – TDS

Signs of extreme upside asymmetry are playing out in platinum markets, notes Daniel Ghali, senior commodities strategist at TDS.

CTAs to buy 5% of their maximum size in this session

“We highlighted that even a small price reversal can now trigger massive CTA buying activity in the platinum markets over the next week, and today’s price action should help trigger the first such CTA buying program. We expect CTAs to buy 5% of their maximum size this session, which is only a fraction of the +60% total they could plausibly buy in subsequent sessions in one record.”

“At current levels, even in a flat band, CTAs would be set to fully cover their shorts in the coming week. This setup for algo flows bodes very well for further upside on the horizon, reinforcing our view that platinum prices have already printed their local lows.”

“A substantial increase in SGE Platinum volumes amid the recent downturn further suggests that buyers have emerged in the physical markets in our view.”