Signs of extreme upside asymmetry are playing out in platinum markets, notes Daniel Ghali, Senior Commodity Strategist at TDS.
CTAs will buy 5% of their maximum size in this session
“We note that even a small reversal in prices can now trigger massive buying activity by CTAs in platinum markets over the next week, and today’s price action should help kick off the first CTA buying program. We expect CTAs to buy 5% of their maximum size this session, which represents just a fraction of the total +60% they could plausibly buy over the next few sessions in an uptrend.”
“At current levels, even in a flat trend, CTAs would be ready to fully cover their shorts over the next week. This setup for algorithmic flows bodes well for further upside on the horizon, reinforcing our view that platinum prices have already marked their local lows.”
“A substantial increase in SGE platinum volumes amid the recent decline further suggests that buyers on the dip have emerged in physical markets, in line with our view.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
