Soon a deficit might occur in the platinum market. There is a potential for the price to exit a narrowing downtrend pattern.
The issue of possible resource shortages in the future is acute in the world. According to one view, the first phase of resource depletion will be increasing prices. In that case, many will lose access to commodities they use now.
Soon platinum, which combines the properties of precious and industrial metals, might become one of the limited resources. It is used in the production of catalytic converters, implants, and electrodes, as well as in oil refining and jewelry making.
Around 75% of platinum is mined in South Africa, which is currently facing production difficulties due to power shortages. The deficit of the latter threatens the production of all commodities, becoming the critical resource.
Platinum might be replaced by palladium in the industry. However, the price and availability of this metal could change significantly then. In addition, two of the largest palladium producers are South Africa and Russia. Consequently, supplies might be complicated.
The platinum deficit could lead to an increase in price in the future due to rising demand and insufficient supply.
According to the graphical analysis, the platinum price is in the formation of the downward pennant on the H4 timeframe. The pattern indicates the continuation of the higher trend when the price goes beyond its limits.
The news on First Republic’s bankruptcy formed a pullback from the support figure.
First Republic Bank was the fourteenth-largest bank in the country. Its assets were about $230 billion.
The spreading banking crisis forces traders to invest in safe-haven assets, such as gold, silver, and other precious metals.
The price is the formation of the third ascending wave on the H15 timeframe. Breaking through the top of the first wave at 1,078.5 will strengthen the rise of the third wave to the downward resistance of the pennant.
Signal:
The short-term outlook for platinum suggests buying.
The target is at the level of 1,100.0.
Part of the profit should be taken near the level of 1,088.0.
The Stop-loss is at the level of 1,058.0.
Bullish trend is of short-term nature, so it is worth selecting the trading volume of not more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
