PLATINUM TODAY – Has platinum had enough?

Otmane El Rhazi from The Bullion Desk.

Short Term: Medium Term: Long Term: Resistances: R1 995-1000 R2 1010 DTL R3 1040 R4 1088 March low Support: S1 945 Low so far S2 745 2008 low Stochastics:Bullish Legend: Fibo = Fibonacci retracement level BB = Bollinger band RL = Resistance line SL = Support line Technical Comment Analysis Prices appear to have found buying at $945, which has put in a mini-floor for now. There seems no natural level on the chart that offers support until $745, the 2008 low – not that we expect prices to fall that far. The downward trend dominates; a move above former resistance at $995-$1,000 would relieve some of the downside pressure, we feel.  The only bullish aspects of the market is how oversold it looks and the upward move in the stochastics.  Macro factors There has generally been buying in the ETFs since June 24 – holdings have risen to 2.73 million ounces from around 2.53 million ounces on June 23. 51,500 ounces were added yesterday alone. So there has been dip-buying into the price weakness, as well as some redemptions too, but it looks as though there has been some buying into the rebound too. The problem is that the ETF buying has been outpaced by the selling from funds on Nymex. The net long fund position on Nymex dropped 537 contracts last week to 18,546 contracts, which was the lowest since July 2012. The market is polarised – the gross long and short positions are extended and both are near record highs, especially the gross short position at 37,240 contracts. The recent peak was 37,794 contracts and the average this year has been 26,532 contracts. So if something were to trigger higher prices, we would expect aggressive short-covering to give prices a boost. Conclusion Prices look oversold, but they have been attempting to rebound in recent days. Some buying is emerging via the ETFs, which may help underpin the market. The longs on Nymex are still very long, but have generally remained committed. The gross short position is just below a record high, which suggests a considerable risk of short-covering once a base is found. We would be on the lookout for an up-wave, but it may take a few attempts before one leads to a meaningful recovery.  All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

The post PLATINUM TODAY – Has platinum had enough? appeared first on The Bullion Desk.