{"id":7064,"date":"2020-11-18T14:20:35","date_gmt":"2020-11-18T19:20:35","guid":{"rendered":"https:\/\/www.fundamentalanalytics.com\/?p=7064"},"modified":"2021-04-25T22:01:05","modified_gmt":"2021-04-26T02:01:05","slug":"mid-week-weekly-review-of-gold-silver-and-palladium-november-18-2020","status":"publish","type":"post","link":"https:\/\/www.fundamentalanalytics.com\/es\/mid-week-weekly-review-of-gold-silver-and-palladium-november-18-2020\/","title":{"rendered":"Mid-Week, Weekly Review of Gold, Silver and Palladium November 18 2020"},"content":{"rendered":"
Mid-Week, Weekly Review of Gold, Silver, and Palladium<\/h5>\n
November 18, 2020<\/h5>\n
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Gold and silver price movements were more subdued this week with the front month contract for gold up 0.49% and silver up 0.77% at the close of trading yesterday, with respect to the close on November 10th<\/sup>, 2020.\u00a0The ratio of the month 1 Gold contract to the month 1 Silver contract (Figure 1) is down 0.3% compared to the close on the 10th<\/sup>.\u00a0The ratio continues to move sideways, still not giving any clear direction for gold.\u00a0As a reminder, a falling ratio often implies gold may move due to the economics of silver.\u00a0With the front month gold and silver contracts closing yesterday at $1884.50 and $24.64, respectively, the gold\/silver ratio is now 76.5, 16.15% higher than the corresponding 15-year average.\u00a0December gold (Figure 2) closed yesterday at $1885.10, up 0.46% and March silver (Figure 3) closed at $24.77, up 0.67% from the close on November 10th<\/sup>. \u00a0It should be noted that silver March open interest is now higher than December, so we have moved to the March silver contract.<\/p>\n

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From an open interest perspective, gold\u2019s total open interest rose 2% over the last week, holding near levels seen since August.\u00a0Volume is once again below the 50-day SMA.\u00a0The latest CFTC report for gold (11\/10) for non-commercial net position of funds shows net positions continuing to fall, nearing levels seen in June and down 40% from the all-time high in February.\u00a0\u00a0While both non-commercial short and long positions are falling, non-commercial longs are falling faster. It is interesting to note that while non-commercials are reducing net exposure, total open interest has remained stable, and implied volatility skew has moved slightly to favor higher priced calls over the last 5 trading days.<\/p>\n

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Now onto silver\u2026 Silver total open interest rose 3.8% since last week (November 10th<\/sup>) and is up 5% for the last two weeks, regaining levels lost after the election with volume is near the 50-day SMA.\u00a0The latest CFTC data (from 11\/10) show non-commercials continue to increase their net long positions by reducing their short positions while the total open positions (futures + options volume) are on a downward trend.<\/p>\n

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Now for Palladium.\u00a0December palladium closed at $2326.5 yesterday, giving back 5.86% from the close last week Tuesday.\u00a0Total open interest fell 1.8% from Tuesday last week but is still up 8% over the last two weeks. \u00a0Palladium volume also continues to remain above its 50-day SMA.\u00a0The November 10th<\/sup> CFTC report showed a huge 50.3% increase in non-commercial net fund positions which effectively erases the anomaly from last week.\u00a0\u00a0This result is a slight increase in net long non-commercial positions from two weeks ago.\u00a0We mentioned last week that the price of palladium did not track with the reduction in net long positions, possibly resulting in some short covering. \u00a0This may be the case, and palladium\u2019s fall in price may be giving some of that back plus continued concerns from COVID as well as additional news that automakers continue to substitute platinum for palladium.<\/p>\n

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The final thoughts I leave you with today are regarding the price of palladium.\u00a0\u00a0The World Platinum Investment Council released its quarterly report today, which can be found here<\/span><\/span><\/a>.\u00a0The first six pages are an overview by CEO Paul Wilson, who provides background on several items.\u00a0These include supply, demand, and substitution of platinum for palladium.\u00a0He mentions what investment is available for exploration, is shifting into palladium-heavy fields versus platinum fields.\u00a0This may make more platinum available in the future.\u00a0In addition, as demand for catalytic elements is increasing due to more vehicles and more stringent pollution standards for both Europe and China, the $1,000 premium for palladium over platinum is driving OEMs to substitute more platinum for palladium.\u00a0He also says this substitution is at a 1:1 exchange of platinum for palladium.\u00a0The real amounts substituted is confidential and he believes this substitution \u201c\u2026is far greater than limited public information might suggest and that substitution volumes [platinum] are likely to increase rapidly in 2021 and beyond as the successful replacement of palladium by platinum is applied to a higher potion of new gasoline and diesel models launched.\u201d<\/em>\u00a0While many of these changes will take time to implement, the changes to platinum to palladium may be occurring faster than expected and could possibly put downward pressure on palladium in the near future, especially as this news is digested.\u00a0\u00a0However, overall demand may continue to improve with additional catalyst need.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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If you have any questions, please contact our Technology Manager, Mike Secen at mike.secen@fundamentalanalytics.com<\/a><\/p>\n

We also invite you to read our other articles and follow us on social media!<\/p>\n

Best Regards,<\/p>\n

The Fundamental Analytics Team<\/p>\n

The information provided here is for general informational purposes only and should not be considered individualized investment advice. All expressions of opinion are subject to change without notice in reaction to shifting market conditions.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

Mid-Week, Weekly Review of Gold, Silver, and Palladium November 18, 2020 Gold and silver price movements were more subdued this week with the front month contract for gold up 0.49% and silver up 0.77% at the close of trading yesterday, with respect to the close on November 10th, 2020.\u00a0The ratio of the month 1 Gold […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7064","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts\/7064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/comments?post=7064"}],"version-history":[{"count":2,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts\/7064\/revisions"}],"predecessor-version":[{"id":7074,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/posts\/7064\/revisions\/7074"}],"wp:attachment":[{"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/media?parent=7064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/categories?post=7064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/es\/wp-json\/wp\/v2\/tags?post=7064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}