Platinum hit the growth target of 985 last week, which was given in a previous report. But a breakout of the downtrend from the highs of January could not be confirmed. Platinum plummeted almost 5% on March 7, falling below its trendline again. After such a fall, prices are gradually stabilizing, waiting for new triggers to come for a directional movement.
Jerome Powell’s speech had an impact on platinum and other commodities, as investors expected that the rate will be raised higher. There is now an 80% chance of a 0.5% hike at the March 22 meeting, whereas it had a near-zero probability just a couple of weeks ago.
At the same time, from a fundamental point of view, the platinum market has a significant potential for price growth. The World Platinum Investment Council (WPIC) issued a number of reports, including a review of the platinum market for the fourth quarter of 2022, annual performance review and forecasts for 2023. According to new data, the platinum market is expected to have a significant deficit this year after two years of notable surplus.
The 2022 surplus of 776,000 ounces of platinum in 2023 will be followed by a deficit of 556,000 ounces. The updated forecast reflects a supply volume being almost unchanged from the last year figures, or up just 3%, while there is a surge in demand of 24%. According to the WPIC management, platinum shortages could be long-term due to supply issues and rising demand in order to meet energy needs.
After the platinum price plunged on March 7, the growth target will be the Fibonacci retracement level of 23,6% (954). That would be a new attempt to break through the falling trend line, and then the rise may continue to the previous local high of 985.
The following trading strategy can be suggested:
Buy platinum in the 930-940 range. Take profit — 954. Stop loss — 925.
Traders can 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.
