Platinum prices managed to break out of the downtrend and start rising, as it was stated in the last week's forecast. At the moment, the ascending channel, in which the price has been moving since late February, is making an attempt to finally form on the chart. Earlier this week, platinum temporarily rose above the milestone level of 1000, but the ensuing pullback took it back down to three-digit levels. So, any further rise should be expected to start from the lower limit of the channel.
Besides the technical factors, the rise in prices of platinum and other precious metals was caused by problems in the U.S. banking sector, which spread to the European financial market yesterday. Against this news background, Moody's rating agency believes that in case of further intensification of the banking crisis, the Fed may pause the cycle of monetary policy tightening. If interest rates stop rising, it will have a positive impact on the cost of precious metals.
Concerning platinum, the World Platinum Investment Council (WPIC) forecasts a deficit of 556,000 ounces of the precious metal in the world market this year. According to analysts, this situation may persist for the next few years due to growth in demand for platinum in the industrial sector. The reason for that is an increasing use of platinum instead of palladium by vehicle manufacturers for producing autocatalysts.
As a result, demand for platinum may increase to 7.985 million ounces, or 24%. Moreover, investment bars and coins made of this metal are also growing in popularity. Meanwhile, platinum supplies are predicted to rise to just 7.428 million ounces, or 3%. The expected platinum deficit for the current year is almost double the previous estimate published by the WPIC in late 2022.
After a rebound from the lower limit of the channel, the price of platinum will firstly move to the level of 1000, and then testing of the upper limit of the channel is possible. This upper limit is now close to the level of 1030.
The following trading strategy may be suggested:
Buy platinum within the range of 965–975. Take profit 1 — 1000. Take profit 2 — 1030. Stop loss — 955.
This content is for informational purposes only and is not intended to be investing advice.
