The Aberdeen Standard Platinum Shares ETF (NYSEArca: PPLT) and the GraniteShares Platinum Trust (PLTM) are each up about 12% this year, which is enough to make the platinum ETFs laggards among precious metals ETFs. However, some commodities market observers believe platinum can capture some momentum into year-end.
Platinum is primarily used in catalytic converters in diesel-powered automobiles, but environmental concerns previously tamped down demand for the precious metal. As such, the price of platinum has fallen over the years amid weaker demand and excess supply, whereas gold and silver have found safe-haven support on an increasingly dovish Federal Reserve monetary policy outlook and palladium benefited from cars that run on gasoline.
“Platinum bottomed at $755 in 2018 and launched into a series of higher lows and higher highs (the definition of an uptrend). That progression conquered the multi-year trendline and validated a bullish trend change. Sentiment remains depressed – it seems we have a new bull market, but nobody cares,” according to FX Empire.
Inklings Of Hope For Platinum
With respect to the other precious metals, platinum presents a value proposition for seasoned investors and beginning investors looking to shore up their portfolios with commodities. On the charts, platinum looks healthy, technically speaking, could be poised for some near-term upside.
“Prices are currently backtesting the multi-year trendline. Holding this area would be incredibly bullish, near term. Worst case scenario, if prices slip back below the 200-day MA, I see strong buying coming in near $800. Either way, the technicals, and recent breakout support a bottom and higher prices,” notes FX Empire.
On the demand side, platinum will continue to enjoy robust industrial demand. Additionally, platinum jewelry is starting to enjoy a jump in demand as well, especially among the Millennial generation—younger generations in traditional gold-centric economies like India saw 2017 platinum jewelry sales jump 25%, according to Platinum Guild International.
“With a renewed bull market in precious metals, it’s just a matter of time before platinum begins to play catch up to gold,” according to FX Empire.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.