When Platinum Group Metals are on the front foot, analysts are watching Palladium, TDS Senior Commodity Strategist Daniel Ghali notes. 

Short positions may start to unwind

“Recall, there are scenarios where the large net short position held by CTAs could be nearly completely unwound should prices continue to rise in a big uptape. These risks to algo positions are particularly acute in Palladium, as we also note that discretionary traders have reaccumulated their epic net short position over the last months.”

“In this context, a squeeze on CTA positioning could morph into a squeeze on discretionary positions, even as we acknowledge that discretionary traders have thus far managed to withstand pain in similar episodes over the last months.”