Platinum price pulled back this week as investors react to the rising risks for a recession in key countries. It retreated to a low of $977, which was the lowest level since November 8 of this year. PT has plunged by more than 7.2% from its highest level this year. This price is about 20% above the lowest level this year.
Platinum and palladium prices have been in a strong bearish trend in the past few days as concerns about the global economy continued. A key concern is China, where the number of Covid cases are nearing an all-time high.
The country reported over 24k infections on Thursday, which is slightly below the all-time high that was reached in April. China is an important market for platinum and palladium because it is the biggest market for cars in the world. The two metals are mostly used to manufacture catalytic converters.
Platinum price has pulled back also because of the ongoing demand and supply dynamics. In its most recent report, the Wold Platinum Investing Council said that there is an ongoing supply surplus in the platinum market. This surplus has been driven by negative investment demand. Demand declined by 13% in the second quarter.
At the same time, there have been some supply constraints in South Africa and North American mining operations. Despite sanctions, Russia has continued to deliver platinum in the market. It accounts for about 11% of global supplies.
Platinum prices have done well as investors react to the easing of global logistics challenges. Recent results by most automakers like General Motors and Volkswagen have shown that the industry is recovering.
The four-hour chart shows that platinum prices have retreated in the past few days. It has dropped by about 17% from its highest level this month. The metal has moved below the 50-day moving average while the Awesome Oscillator has moved below the neutral point. The Relative Strength Index (RSI) has moved close to the oversold level.
Therefore, platinum price will likely continue falling as sellers target the important support level at $938. This is an important price since it was the highest level in September and October 7. It will then rebound and possibly retest the important resistance level at $1,050.
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