Is The Platinum Plunge Over?

Investment demand for this precious “white metal” has declined by 380,000 ounces from the fourth quarter of 2014.   That figure is probably already outdated with the most recent plunge in prices. Investors’ appetite for this “precious metal” has hit new lows on the misery index. In addition, platinum prices are trading at a six-year low and the platinum: gold ratio is at its lowest point in two years.
There are two main reasons behind the recent decline in platinum prices. One reason is weaker  industrial demand due to a stagnating global economy. The other reason is the recent downtrend in the price of gold which is pulling down the entire precious metals complex.

However, there are a couple of reasons why the price of platinum may be close to a bottom. For example, above ground platinum stocks are expected to fall by 17% on a year to year basis in 2015.  Also, there is a possibility of a short covering rally. This is because gross speculative short positions in platinum recently hit at an all-time high, suggesting negative sentiment towards platinum is overdone

 Only technical analysis will help spot the bottom……so let’s go directly to the charts.

Daily Platinum Futures

 

Quarterly Platinum Futures