A Generational Buying Opportunity is Approaching in This Precious Metal

Platinum has been suffering a brutal, yet steady, decline during 2015 and appears poised to drop into the ‘triple digits’ for the first time since early 2009:

 

Plat_Monthly

After a painful (for precious metals holders) 4-year decline platinum may be on the verge of a climactic low and a generational buying opportunity. The inflation adjusted 2008 panic low is roughly $925/oz in today’s dollars. Moreover, resistance from 2004-2005 between $875-$925 is likely to offer a significant layer of support in the event of further declines in the platinum price over the coming days/weeks.

A massive stop-loss liquidation below the psychological $1,000 level could be just what the doctor ordered to put an end to the 7+ year cyclical bear market in platinum. Goldman Sachs is forecasting a $900/oz average price for platinum in 2016 based primarily of a weakening South African currency (South Africa accounts for roughly 60% of global platinum production) and the investment bank sees potential for even further weakness:

“If the rand was to weaken even further, we believe that the platinum price could undershoot our forecast,”

I will leave the ‘fundamental’ analysis of the platinum market to others. All I know is that the risk/reward proposition of a long-term investment in platinum at ~$900/oz couldn’t be much more attractive…