Platinum prices continue to move within an ascending channel. The lower boundary of the channel now seems to be a rather strong support, from which the price steadily reverses to rise. Platinum’s inability to hold above a round level of 1,000 might be outlined as a negative aspect, but reaching this level at least can be used as a signal to fix some profits.
Panic around the banking sector’s problems in the U.S. and Europe has mostly calmed down, leading to a drop in platinum prices. However, ANZ strategists believe that investors’ improved risk appetite will not affect further investments in precious metals. Moreover, increased risk propensity, on the contrary, might predict a rise in the whole sector of precious metals.
Despite all the measures taken by financial regulators to build market confidence, the uncertain macroeconomic background will continue to support investors’ buying interest in safe-haven assets. Now the U.S. Fed meeting, which will be held today, is in focus. Any hints at a future pause in the rate hiking cycle will favorably affect precious metal prices.
Increased demand from the automobile industry will be a favorable factor specifically for platinum. Global vehicle production is still lower than pre-pandemic levels, however, it is not an obstacle for rising platinum demand. In 2022 it grew by 12% and this year it is forecast to rise 10% more. A key factor of demand growth is increased usage of platinum instead of palladium in production of autocatalyst.
The main growth target for platinum prices now is the range of 1,005-1,015, and only in case of a firm consolidation at these levels the way to the upper boundary of the ascending channel in the range of 1,040-1,050 will open. Cancellation of the growth scenario might occur when declining below 970.
The following trading strategy may be offered:
Buy platinum in the range of 980-985. Take profit 1 – 1,005. Take profit 2 – 1,015. Stop loss – 970.
Traders may also use a 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.
