Platinum price trading 0.23% higher today as the precious metal recovers some of Friday’s sharp losses. The precious metal is in bearish market since 2011 as the fundamentals shifted for the platinum.
The platinum industrial demand dropped in recent years as automakers have turned their production to gasoline engines rather than diesel engines. Platinum used as a catalyst in the diesel car engines, which the global demand has dropped in last decade. Above that some car makers shifted from platinum to much cheaper palladium.
Electric cars penetration in the markets might add to pressure for the demand of platinum and also palladium. Platinum has underperformed gold and silver the recent years.
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Platinum Price Technical Analysis
Platinum price bearish action started in 2011 from $1,900 high and since then is under heavy selling pressure that drove the price down to $700/oz. The precious metal started a rebound from $700 lows in August 2019 helped by the rally in gold and silver prices. The rebound stalled just below the $1,000 mark in September. The correction form the September high’s stopped at $880 zone and since November the price consolidates between $880 and $950 territory.
Platinum Bulls in Control
The precious metal price outlook is bullish for the short term as the platinum price in the weekly chart trades above all major weekly moving averages. On the daily chart the signals are also bullish. Platinum prices managed to break above the eight-year downtrend line last week but the sharp drop on Friday return the platinum price below the descending trendline.
Now Platinum bulls need a break above the daily top at $934.34 first and then need a break above Friday’s high at $947. If the price breaks that level then we will have a bullish impact as the price will exit the long term downtrend line and more buyers might enter the market. The next resistance stands at $955 the top since November 4th. Breaking above this level might require a fundamental catalyst that might push the price up to $997 the September highs.
On the downside, immediate resistance for the platinum stands at $926.87 the daily low. Friday’s low at $922 will provide some support, while a strong bid zone will emerge at $904 the 50-day moving average.
Fundamentals Are Weak
All in all the technical picture is bullish for the precious metal in the daily and weekly chart. The long-term fundamentals are not supportive for the platinum price as the industrial demand for platinum drops amid the shift from carmakers to gasoline and electrical engines. An appreciation in gold and silver prices will have a positive impact on platinum prices as the platinum has underperformed its peers the last decade.