We haven’t paid much attention to platinum frankly because it’s a relatively small market compared to gold & silver and much less liquid. After wedging lower from its 2011 rebound peak platinum has been in one of the steepest downtrends of any global market for the last year:
Each successive lower low has taken place with clear momentum divergences, characteristic of a market that is experiencing decelerating downside momentum.
Pulling the chart out to a longer time frame we can see that platinum is in the midst of testing a 14-year uptrend drawn from the 2001 low:
This level near $1,050/oz also represents important support/resistance dating all the way back to 2006. Meanwhile, managed money hasn’t had this small of a net long position since 2012, just before platinum vaulted $300 higher within a couple of months:
While platinum’s fundamentals may be relatively poor due to a weakening South African currency and continued speculative long liquidations, the fundamentals always look bad at the bottom. It seems that one of two scenarios are about to unfold and one scenario looks much more likely than the other:
- A short/intermediate term low is about to be put in place near the $1,000-$1,050 area
- Platinum is on the verge of sinking below $1,000 into a deeper long term bear market
I’ll let you guess which scenario i’d prefer to bet on….