Platinum investment is on track for 2021 | 2 April
Platinum Price Forecast relative to Long Term Monthly - Medium Term Weekly - Short Term Daily - and Hourly (not shown) data.
(Previous week in brackets)
|PT Trend||↓ (↓)||↑ (↑)||↑ (↓)|
|PT % Risk
|82 (83)||62 (61)||56 (45)|
Total allocation 35% (50%)
2 April 2021 close: Since our entry into Platinum in Q2 2020, this heaviest source of nature (21,400KG/m3) of all metals has performed very much as expected. Long term risk weight has turned down at the close of last month and continues down starting April. This downturn starts from only a medium high risk percentage with bearish divergence. We may definitely call the Platinum move that started in March 2020 a MAJOR 1O YEAR TREND REVERSAL the monthly long term risk weight has a few more important moves to make on the upside. The corrections in the shorter term time scales behave in a more bullish fashion looking to return to the main uptrend already in neutral risk ground. Our approximate 35% Platinum position within the metals portfolio is a 'Hold' aiming for the next 2011-2013 objective range of $1400-1600.
26 March 2021 close: Weak price action into Thursday and a fairly strong finish on Friday is such a different picture from what we have seen the past few years. What we've analysed last year is slowly becoming reality. Platinum clearly is still very much undervalued and we have no doubt that the current picture indeed tells a much happier story. Our current target is the 2013 consolidation range between $1400 and 1500. The cushion, coming from an 830 to 920 entry last year gives enough cushion to sit through some volatility whilst risk weight also still favors the long side. No Change.
GOLD/PLATINUM Ratio Price Risk Charts & Analysis
(Previous week in brackets)
|Gold Platinum ratio||Monthly||Weekly||Daily|
|Trend||↓ (↓)||↓ (↓)||↓ (↑)|
|7 (12)||16 (19)||33 (71)|
Total allocation 35% (50%)
Gold/Platinum Ratio Charts
Daily Gold/Platinum ratio has shown very rapid upticks in risk combination with relatively minor price moves to the upside. This pattern has been developing since June of 2020 and still applies. It reasons for continued weakness of Gold versus Platinum. This ratio may develop a more sideways corrective pattern in coming weeks, but that is for daytraders.
The Weekly risk chart also points towards an even potential rapid move in favor of Platinum. As risk weight is already traveling into lower percentage it is impossible predict where price will move as it depends on short term time scales diverging towards a bearish high risk position. Weekly risk chart confirms a pretty safe longer term hold of Platinum.
The low risk 7% Monthly chart is not finished and with this Gold/Platinum ratio still at a well above equilibrium price, the price move down could be significant even with a minor further risk drop or after some consolidation or correction. Our current outlook for reaching a 20, 30 or 40% lower ratio would be in 3 to 6 months.
Very few analysts bring in a quarterly chart to determine a larger strategy. We have done this for a long time already as it really adds insight into the larger picture and often prevents that natural and emotional drive to trade and taking profits and losses early.
At the start of April we see an immediate further risk drop from about 30 at March Q1 close to 15% risk into Q2. Low but not finished. This could confirm that we may see an intermediate bottom at a new low price ratio with 1 or 2 quarters.
It took from from March to November 2020 to create that top formation around a Gold/Platinum ratio of 2.10.
The subsequent correction which is in full play has taken the ratio from 2.20 to 1.40 and is taking a bit of a breather right now. Daily risk weight shot up with relatively little price change which is typical for any market in the middle of a primary trend. We expect this primary downtrend to dominate the Gold/Platinum ratio for many more months with several smaller and larger corrections along the way.
Weekly risk weight got oversold and showed minor bullish divergence a few weeks ago. This picture should not be seen in isolation, but it can develop a stronger correction, say towards 1.60 with Risk weight also sharply moving up. Both the very long term and short term indicators will give direction as to when we are beginning to reach a major bottom. Somewhere later this year probably.
A low risk weight is important to consider before a trend change but hardly ever signals a bottom and so many different timescales interact. From hourly to quarterly. The Monthly trend is down and most likely to produce bullish (higher) risk to (lower) price divergence before it converges with shorter term timescales into a real bottom. This looks many months away and we should maintain an initial objective closer to 1.10 now, before zooming in on long term Gold/Platinum ratio equilibrium at 0.88. I.e Platinum more expensive than Gold. Patience.
5 more days till the end of Q1, 2021. Looking at the 50 year chart above it is immediately clear that the average ratio value is somewhere around that 1 to 1 level. The quarterly downtrend is strong which either means we can close the historic 30-40% price gap very quickly or slowly. Hard to predict as short term timescales can change direction at a moments notice or without warning. We believe that this quarterly chart gives strong guidance that the end of this primary trend is not yet in sight.