Platinum prices, in accordance with the previous forecast, made a new local high just above 1115, after which the correction started. At the same time, other precious metals still continued to rise through yesterday, but their decline today could further strengthen the selling in the platinum market.
As in the case of gold, platinum's decline could be provoked by profit fixation by traders, who expected positive statistics on inflation in the U.S. for December. The figures are within expectations, that is, now there are no preconditions for any significant reassessment of the financial market situation. And considering the good growth of the last weeks, many market participants will remember the saying "buy on rumor, sell on fact" and will close some of their positions.
MKS PAMP GROUP published its forecasts for the prices of precious metals. Thus, the minimum price for platinum this year is expected to be $850, and the maximum is $1,350 per ounce. The average annual price is expected to be $1,100. That is, even now, after only 2 weeks from the beginning of 2023, platinum is already trading around the annual average. The desire to continue buying at such prices may decrease, and investors will wait for local lows to increase their investment in platinum.
For a potential rise in the price of platinum even higher it may require an actual end of the cycle of monetary policy tightening by the world's central banks. And this is unlikely to happen before the 2nd quarter of the year, and until then the increase in prices will be unstable, where after each wave of growth at least a small pullback down should be expected.
As a goal of the current pullback we can note the level of 1055, corresponding to the local highs of November and December. Stochastic confirms the signal to the correction, decreasing both on the daily and hourly charts. At the same time, the indicator has not yet reached the oversold zone, which means that there is still some space for reduction.
The following trading strategy option can be suggested:
Sell platinum in the range of 1070-1075. Take profit – 1055. Stop loss – 1085.
Also, traders may use Trailing stop instead of a fixed Stop loss at their convenience.
This content is for informational purposes only and is not intended to be investing advice.
