Price action in the platinum market in US dollar terms has rarely been so trendless and currently at the $955 level. This phenomenon is reflected in the weekly Bollinger Bandwidth which is currently displaying a 7 year low.
The weekly gold to platinum ratio is marking an all time high of 3.05, a level which shows a dramatic shift in sentiment compared to the 2008 level of 0.5. The 14 week relative strength index is now into overbought territory, while the weekly choppiness index is at 25, an area which suggests that trend exhaustion is nearby.
Supply and demand outlook reported by the World Platinum Investment Council remains utterly contradictory to the technical reality which can be seen by the following statistics published recently:
- Third consecutive annual platinum market deficit - forecast at 539 koz for 2025
- Supply remains severely constrained despite improvements in recycling, edging up 2% in 2024 to 7,269 koz and 1% to 7,324 koz in 2025
- Automotive demand is projected to hit an eight-year high of 3,245 koz in 2025
- Steady growth in the jewellery sector, with a 5% year-on-year increase forecast for 2024 and a 2% increase in 2025, driven by a surge in Indian fabrication
- Industrial demand to decline by 9% in 2025 to 2,216 koz as substantive capacity expansions taper; it will remain above the ten-year average
- In 2025, net positive investment demand is expected for the third consecutive year, bolstered by Chinese bar demand.
Should the Gold to Platinum ratio return to 2008 levels, one can assume that, based on the current gold price of $2915, the Platinum price could approach the $5830 area.
Disclaimer
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