Commodities

Metal Analysis Report 9/10/19 – Platinum Is Undervalued

Platinum is a valuable and precious metal. Platinum is used extensively for jewelry, but its main use is in catalytic converters for cars, trucks and buses. This accounts for about 50% of demand each year. Platinum is very effective at converting emissions from the vehicle’s engine into less harmful waste products.

Platinum is also used in the chemicals industry as a catalyst for the production of nitric acid, silicone and benzene. The electronics industry uses platinum as well for computer hard disks and thermocouples. Lastly, platinum is also is used to make optical fibres and LCDs, turbine blades, spark plugs, pacemakers and dental fillings.

But what I didn’t know is,

The platinum to gold ratio slipped to its lowest level on record reaching 0.556 in August 2019. At nearly half the price of gold – platinum was/is severely undervalued. For reference, platinum has traded at a premium to gold about 85% of the time over the last 40-years. In fact, in 2000, 2004 and 2008 platinum was more than double the price of gold.

Source

So what’s the next play on platinum, lets go to the charts to find out?

Monthly Chart (Curve Timeframe) – monthly supply is at $1250 and monthly demand is at $800.

Weekly Chart (Trend Timeframe) – the trend is up as indicated by the swing lows and swing highs.

Daily Chart (Entry) – the chart suggests to go long at the daily demand at $910 or $860. However, I prefer the demand at $860 as that was the origin of the strong move higher that took out the two pivots highs.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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