CTA trend followers are adding to their Palladium longs as price action triggers uptrend signals, TDS’ Senior Commodity Strategist Daniel Ghali notes.

CTAs are set to sell at a large-scale over the coming week

“Fear is the trade, given the US has requested G7 nations consider these inclusions, but the EU has already stopped short of considering them over the past years. Though with flows over the last weeks otherwise muted and with US election season underway, there are pathways for momentum to persist in the near-term.”

“Interestingly, however, the scope for subsequent CTA buying activity is limited, with a large uptape over the coming week only likely to spark small-scale purchases from algo traders. Meanwhile, price action has been as supportive as it can be for Platinum markets, adding a few days of delays to potential large-scale selling activity from the trend follower community.”

“Still, in every reasonable scenario for prices, CTAs will sell at a large-scale over the coming week. Even a modest reversal could be sufficient to catalyze a massive selling activity before the week's end.”