Platinum continues to fall for the third day in a row, hitting a new low of this year at 1010. The RSI has almost reached the oversold zone, but the support level that might stop the decline is still a little bit lower, at 985. So, there could be more platinum depreciation in the coming days.
In this case, platinum has better chances to grow than to fall in the long term. Analysts at Swiss precious metals trader MKS PAMP Group assessed platinum's prospects for 2023. In their view, the most likely scenario is that the precious metal will move in the range of $1100-1350 per ounce, which is higher than the current price.
Significant supply disruptions of the metal could be seen as a major reason for platinum's appreciation. China's reopening is also expected to contribute, as demand for platinum has already started to pick up there.
Ole Hansen, a strategist and director of stock products at Saxo Bank, believes that 2023 will be a positive year for precious metal prices, which are supported by economic downturn’ forecasts and high investment risks. Moreover, a cycle of interest rate hikes by global financial regulators may come to an end this year. This is the reason why Hansen predicts a weaker dollar and continued strong demand for precious metals from central banks.
Platinum is likely to resume growth as it moves closer to the support level of 985, which proved to be highly resistant in November-December last year. Until then, there is a chance to open short positions, particularly if the round 1000 level is broken down later today.
The following trading strategy can be suggested:
1) Sell platinum at the current price. Take profit 1 - 1000. Take profit 2 - 985. Stop loss - 1025.
2) Buy platinum when it descends to the support level of 985. Take profit 1 - 1000. Take profit 2 - 1025. Stop loss - 970.
Traders may also use Trailing stop instead of a fixed Stop loss at their discretion.
This content is for informational purposes only and is not intended to be investing advice.