Is Platinum really the forgotten hard asset? | 28 August, 2020
Platinum Price Forecast relative to
Long Term Monthly (LT-M) – Medium Term Weekly (MT-W) – Short Term Daily (ST-D) – and Hourly (not shown) data
(Previous week in brackets)
|PT Trend||↑ (↑)||↓ (↓)||↑ (↓)|
|Pt % Risk
|63 (63)||69 (75)||34 (32)|
|Allocation||Pt:20% Ag:45% Au:35% (Total 100%)|
Platinum/USD live price
This week we have split our PM forecast blog into the three separate metal sections Gold, Silver and Platinum. The Silver and Platinum sections also resp. show the Gold/Silver and Gold/Platinum ratio analysis.
Is Platinum really the forgotten hard asset?
Platinum is more rare than gold, it is heavier than gold, it has strong industrial use and the price has dropped versus gold since June 2008. Ever since Au/Pt ratio rose above 1.15 in December 2015, currently at 2.12, we have been wondering why this most exclusive metal in the hard asset space has been under such pressure. Limited liquidity at some point will drive up the price very quickly as we know from history. South African miners appear to be even closing down Platinum production and selling above ground stocks. This keeps a lid on prices and very much look like a Gordon Brown type action to stay afloat. There is a lot more to say, but the bottom line in the narrative is that Platinum is simply dirt cheap and is likely to develop a massive correction to rediscover that historic equilibrium above 1.00 versus gold. The images of the daily through quarterly Au/Pt ratio below tell the technical story. They all show the kind of divergences within their own time frames and against the other time frames. We only started to allocate some gold and additional funds to Platinum in July and look to hold until this market takes off. The technicals are ready for it and espcially the long term risk weight looks very positive to hold this position and be patient. On a break of the next first resistance at $1040 we are likely to add and increase our total allocation to precious metals.
Non-USA private investors best open an account at Bitpanda where you can buy Platinum which is 100% backed by physical stored in Switzerland and Austria. Unfortunately Bitpanda does not yet allow US customers top open an account. That moment will come and will accelerate the value of this regulated exchange and the value of BEST tokens.
No change to holding our current maximum allocation to Platinum.
As said: “PT needs a move above 1040 to trigger the expected rally to equilibrium or at least towards $1925. Patience will be rewarded”
21 August:: The past two weeks we introduced a stronger view on Platinum. That hasn’t changed.
The past week saw another rally in the metals which halted on Wednesday turning south again. So, what is the Gold/US$ risk play here. The position is long from very early in this advance hence very limited trading risk. Technically we can argue an Elloitt correction to the start of intermediary wave 5 around 1700 or a 38% Fibo correction of the entire advance which started at 1450 last March. 38% because a really fundamentally strong market should not c orrect much more than that. The point is that in strong markets in a longer term advance typically develops bearish divergence several times in the MT and LT timeframes before making a more serious correction. And this is why we should not play shorter term correction because a real risk of missing the best long trade ever could be devastating from a wealth preservation point of view. Hence accepting the correction at hand and be patient is the right longer term approach.
Platinuj again showed weakness in the ratio at the end of last week but just like wait for Silver it is a matter of time before Pt reaches par with Gold again and possibly well above. No Change.
GOLD/PLATINUM Ratio Price Risk Analysis
(Previous week in brackets)
|Trend||↓ (↑)||↓ (↑)||↑ (↓)|
|63 (66)||71 (69)||88 (70)|
|Allocation||>Pt:20% Ag:45% Au:35% (Total 100%)|
Gold/Platinum Ratio Charts at week’s close