Technical analyst Clive Maund tracks movements in
the platinum, gold and silver markets.
It was a very good day for the metals Friday, as they rose sharply in
response to the dollar going into reverse after a sizable run-up. A very
significant development was that platinum broke out of its Head-and-Shoulders
bottom on strong volume, a move
which we had expected that marks the start of a bull market. Copper, gold
and silver also rose with silver having a particularly strong day, and
although copper and silver have yet to break out of their Head-and-Shoulders
bottom patterns, the breakout by platinum is a sign that they will follow
suit and break out soon. We can see the breakout by platinum out of its fine
Head-and-Shoulders bottom on its latest 6-month chart below.
An important point to make at this juncture is that platinum is VERY GOOD
VALUE HERE. Our very long-term chart showing the platinum price relative to
gold, reveals that it has never been cheaper relative to gold. Gold will buy
more than three times as much platinum as it did just over 10 years ago back
in 2008. You have to go back as far as 1982 to find a time when platinum was
almost as cheap relative to gold as it is now. What this means, of course, is
that is that there is a high probability that platinum is going to outperform
gold going forward, and so if gold is in a bull market, as expected, platinum
should perform even better. Another potential big driver for the platinum
price is that, because 70% of it is produced in South Africa, a country whose
leaders are determined to make the place end up like Zimbabwe, there could be
serious supply disruptions if anarchy prevails. Note the pronounced bullish
Falling Wedge on the chart for platinum relative to gold, which strongly
supports the contention that platinum is set to outperform.
Click on chart to pop-up a larger, clearer version.
We'll end with a quick look at silver, where we see on its latest 6-month
chart that although it didn't break out of its Head-and-Shoulders bottom
yesterday like platinum did, it had a big up day with a large white candle on
strong volume, which is very bullish and a sign that it is getting ready to
break out.
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Charts provided by the author.
CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data
available to him, at the time of writing. Mr. Maund's opinions are his own,
and are not a recommendation or an offer to buy or sell securities. Mr. Maund
is an independent analyst who receives no compensation of any kind from any
groups, individuals or corporations mentioned in his reports. As trading and
investing in any financial markets may involve serious risk of loss, Mr.
Maund recommends that you consult with a qualified investment advisor, one
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with financial ramifications. Although a qualified and experienced stock
market analyst, Clive Maund is not a Registered Securities Advisor. Therefore
Mr. Maund's opinions on the market and stocks can only be construed as a
solicitation to buy and sell securities when they are subject to the prior
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