Wednesday, November 4th 12:24 PM IST

Platinum, Palladium may drop further: Commerzbank

# Platinum Prices  # Palladium Prices  

"The palladium price has fallen significantly in the meantime, which suggests that positions have been reduced. We see further downside potential for the palladium price in view of the currently negative investment demand and speculative market positioning," the German bank added.

NEW YORK (Bullion Street): Commerzbank sees potential for more weakness in platinum group metals, which are lower so far Tuesday.

According to Commerzbank, palladium was the biggest loser among the precious metals Monday and is below $650 per ounce again for the first time since the end of September.

In addition to renewed outflows from exchange-traded funds, with holdings reduced by another 31,600 ounces Monday, weakness was likely due also to profit-taking given that net-long positioning had risen in the week to Oct. 27 to the highest level since early July.

“They had been increased for seven consecutive weeks, meaning that the price rise up to that point was probably driven at least in part by speculation,” said analysts at Commerzbank.

“The palladium price has fallen significantly in the meantime, which suggests that positions have been reduced. We see further downside potential for the palladium price in view of the currently negative investment demand and speculative market positioning,” the German bank added.

“The situation is much the same for platinum, where net-long positions even find themselves at a nine-month high of 22,300 contracts. As with palladium, platinum has also seen increasing outflows from its ETFs in the meantime. If not only these ‘strong’ hands but also the ‘weak’ hands (speculators) were to withdraw, this would doubtless weigh on the platinum price,” Commerzbank noted.

As of 8:28 a.m. EST, Nymex January platinum was $13.50 lower to $964.90 an ounce, while December palladium was down $9.55 to $640.80. Platinum slid to its lowest in nearly four weeks on Tuesday, while palladium fell to a five-week low.

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