(Investing.com, Tues. July 28th, 2020) – Given the current fundamentals, platinum could be the sleeping giant in the current environment. It’s the precious and industrial metal with the highest density and boiling point of all of the other sector members. As such it could be biding its time before finally making a move.
Platinum has not kept pace with gold, silver, palladium, or rhodium. In late 2015 and early 2016, when the other metals were falling to bottoms, platinum reached $812.20 per ounce. None of the other precious metals fell below the lows from that period, but platinum reached a low of $755.70 in 2018.
During the risk-off period in 2020, it fell to $562 per ounce, the lowest price for platinum in eighteen years, since 2002. The price has come back from the March 2020 low, but the precious metal continues to lag the other members of the sector.
As the weekly chart, above, shows, the most recent high in platinum came last week at $964 per ounce. Platinum’s high in 2020 was in mid-January at $1035, which stands now as technical resistance.
Source: CQG
Platinum is a precious and industrial metal. In years past it typically traded at a premium to gold. However, at the end of last week, October platinum futures were over $940 per ounce below the price of August gold futures.
Precious metals prices are all trending higher, and platinum could offer the best value proposition in the sector. When it comes to its applications as an industrial metal, platinum’s applications are stellar, and numerous. As a financial asset, it has a long history as a store of value.
Meanwhile, annual platinum production comes from South Africa and Russia. In Russia, platinum is a byproduct of nickel output. Primary production comes mostly from South Africa. The low price for the metal has caused many platinum mines to reduce production. Rhodium is a byproduct of platinum output. The decline in platinum production caused a shortage of rhodium, and the price exploded higher.
Platinum could be a sleeping giant in the precious metals arena. A move above the $1035 technical resistance level could launch platinum to higher highs. The record high for platinum came in 2008 at $2308.80 per ounce. At over 2.4 times lower than its record high, platinum offers value in a sector of the market that continues to be incredibly bullish.Platinum Continues To Lag Other Precious Metals; That Could Be About To Change4Comments (4)
Posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com