As Platinum Prices Rebound, Resistance Is Ahead
Platinum for July delivery is down fractionally to $1,773/lb. The market has rallied in recent weeks, touching as high as $1,790/lb today. The rally began from support at the 200-day moving average. Note that the recent breakdown occurred at $1,790. Thus, that level is now resistance and we can expect selling pressure initially.
Zimbabwe is giving foreign Platinum producers six months to sell majority stakes to ‘black’ Zimbabweans. Could this affect production in the long-term? We’ll have to see. Shares of platinum producers operating in Zimbabwe sold off in recent days.
The recent decline from $1,850 to $1,650 helped reduce the speculative froth in the market. Speculative long positions declined by 38% while open interest fell by 25%. However, the market needs some fundamental positives to be able to retest its high. The US Dollar is heavily oversold. A rebound would present another roadblock.
Turning to the chart, we note that Platinum faces stiff resistance at $1,790 to $1,800. The market has initial support at $1,720-$1,725.
Jordan Roy-Byrne, CMT
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