Platinum prices have been moving steadily upward during the spring. The end of last week was marked by a corrective decline of over 6%, but the uptrend line again became strong support and prevented the quotations from going under 1055. Platinum is now gradually regaining lost positions, and positive news and an advantageous chart may contribute to it.
Earlier this week, the World Platinum Investment Council (WPIC) released its first-quarter report for 2023. Global consumption of metal rose by 28% or 441,000 ounces. This was due to a 71% rise in investment demand as well as increased interest in platinum from the automotive (+9%) and industrial sectors (+8%).
At the same time, the production of refined platinum fell by 8% or 96,000 ounces. The output of platinum from autocatalyst recycling (-15%) and jewelry making (-3%) also declined. As a result, the global market was short of 392,000 ounces of metal for the first time since the 2nd quarter of 2021. One of the main reasons for the platinum supply shortfall is problems with electricity in South Africa. This country has the status of the world's largest producer of platinum.
The WPIC has reviewed its forecast for the current year based on the above statistics, increasing the projected platinum deficit to 983 thousand ounces. This figure is 77% higher than the value indicated in the report for the 4th quarter of 2022. The review of expectations is caused by a fall in the supply of platinum amid rapidly growing demand for the metal.
The technical analysis also shows a new wave of growth in platinum prices. Quotes found strong support at the uptrend line. The Stochastic indicator fell to the oversold area due to recent correction and may form a full signal for purchase soon. 1100 will be the first growth target, then the local highs of April and May could be updated.
We may offer you the following option of trading strategy:
Buy platinum in the range of 1065-1075. Take profit — 1100. Stop-loss — 1055.
This content is for informational purposes only and is not intended to be investing advice.
