- Summary:
- The platinum price is struggling as recession hopes rise. I explain what to expect now that platinum prices seem bearish.
In November, I wrote that the platinum price would get ugly before it got better and predicted that it would crash to about $938. I followed up that article with another one in December in which I hinted that it would hit $1,200 in 2023. The latter prediction was working smoothly until platinum faced a major resistance at $1,103. So, what next for platinum prices?
Platinum weekly analysis
Platinum’s fundamentals appear solid for now. The US dollar index (DXY) has plunged to the lowest level in more than 7 months. In most periods, precious metals like platinum and gold tend to have an inverse relationship with the greenback.
Further, American inflation is edging downwards while retail sales are falling. These dynamics could see the Federal Reserve start cutting rates later this year. In a statement, Fed’s Lael Brainard insisted that the Fed will need to stay the course on rate hikes in the coming months but investors are not convinced.
Technical analysis can help traders predict where the price of an asset will be in a certain period. The weekly chart reveals that the long-term Platinum trend has been bearish since it peaked at $1,338 in February 2021. As it dropped, the metal formed a bearish channel pattern, which it tested its upper side last week.
Platinum formed a bearish engulfing pattern last week. In price action analysis, this pattern is usually followed by more weaknesses. It has also moved slightly lower than the important support level at $1,032, which was the highest point in 2017 and 2020. It has moved above the Ichimoku cloud.
Therefore, the weekly chart suggests that the platinum price will continue falling in the near term. The next reference level of this trade will be at $966, the highest point on August 8 2022. The trend rejection point of this trade will be at $1,098.
Platinum 4H chart analysis
Meanwhile, turning to the 4h chart, we see that platinum price formed a triple-top pattern this year. This pattern tends to be a sign of a reversal. The neckline of this pattern was at $1,045, which was the lowest point on January 6. This price was slightly below the key level at $1,051, the highest level on December 1 last year.
Platinum will likely continue falling, with the next reference level to watch being at $995. This price coincides with the ascending trendline that connects the lowest levels since November last year. It is about 4% below the current level.
