Platinum Hits 1.5-yr. High; Much More Upside Room to Run

(Kitco, Wednesday, Sep.4th, 2019) – Platinum futures on Wednesday traded sharply higher and hit a 1.5-year high as prices approach $1,000.00 an ounce. See on the weekly continuation chart for nearby platinum futures that prices have rebounded smartly from the 2019 low. However, see too that the weekly chart shows prices are still well into the lower one-third of the recent historical trading range. That suggests there is still much more room to run on the upside for prices in the coming weeks and months. The next upside technical objective is longer-term technical resistance at the $1,030.00 area. A move above that resistance area would open the door to a rapid move to $1,200.00, and above.

Commentary

In the past (8) years many platinum owners have seen the metal down as far as 75% from its 2011 high of over $2,200.00 / oz. , to that end any precious metals dealer would have to say what happened? Part of the answer to that question is the lack of a true expanding global economy during the high tax, high regulatory era of the Obama presidency , which interestingly lasted (8) years.

It is no secret that the # 1 in the world U.S. economy is expanding under Trump, not to endorse this president in any way but that is now plain to see, (excepting  the China trade war that is having a dampening effect on the U.S. economy recently) that cutting taxes and erasing years of cumbersome regulations hopefully will continue fueling the U.S. employment growth and consumer’s  purchasing of durable goods like automobiles.

The reason platinum is rising is that it is part of the Platinum Group Metals or PGMS, (including sister metals silver & palladium) and 40% of its applications are catalytic converters in cars, and that takes expanding economies resulting in DEMAND for new automobiles. DEMAND that has been missing from this earthbound economy and has now returned, with China leading the way to an enormous new middle class that needs transportation, and that means building cars and THAT means platinum & palladium DEMAND for the first time in almost (10) years.

If investors have ever wondered why silver has been down, the answer is that silver is a noble, or white metal along with platinum , palladium and rhodium , (which all require expanding industrial economies to drive demand) and now silver is rising with platinum while palladium has doubled in price in less than a year.

Posted By :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com