The recent $100 move in the platinum price from the beginning of March has brought out the bulls in a big way. Platinum futures tipped right above the $921 level, got swiftly rejected, and rebounded to close today around $911. The chart above depicts the price peaking out of a long 8+ year downtrend on the hustle to $921.
A formal breakout (e.g. a definitive close on the daily – and particularly the weekly – chart above $917 level) would send a strong message to the entire metals complex, both on a relative basis and an absolute basis. Platinum has been the laggard relative to gold and especially to palladium, and the ratios with each remain at historically low levels. A big secular breakout here could usher in a rapid move for platinum, and turn it from laggard to leader in the sector.
However, for a closer look at the action, reference the chart below:
I am using the secondary high from February 2018 for the starting point of the Fibonacci retracement, and the chart shows platinum getting rejected right at the 61.8% Fib line, which is also an area with strong market memory (area of significant consolidation in the summer of 2018), coinciding with the eight-year downtrend line. It’s a key area of resistance, so platinum needs to break through here before we get bullish. The next few days will be telling.
Charts made with Optuma Software