Platinum Prices Expected to Remain Stable

Platinum for April delivery is higher by $18 to $1,805/lb. The market failed to reach its technical target we outlined a few weeks back. It is higher today thanks to a rebound from technical support at $1,780 and a broad advance in the metals.

Anglo Platinum, the world’s largest producer, expects a stable price for 2011 around $1,800/lb. Growth in demand will be matched by the growth in supply, which is a positive situation and healthy when they happen,” Sandy Wood, the head of the commercial unit, said in an interview in Tokyo yesterday.

Meanwhile, the China Association of Auto Manufacturers is looking for auto demand to rise 10 to 15% this year after a torrid 32% increase last year. Goldman Sachs (NYSE:GS) believes shortages of Platinum and Palladium are possible in the second half of the year as US demand will tighten the supply-demand picture. Though, any forecast reliant on US growth seems hopeful at best. We usually focus on the on the ground situation in South Africa. It is the majority producer of the world’s Platinum. Power outages and labor strikes have, in the past contributed to supply problems and higher prices.

As we noted at the top, Platinum failed to reach its cup and handle target. It is not too early to call failure as the market thrice failed at $1,860. It did find support at $1,780. The current range looks to be $1,780 to $1,850. The market will face immediate resistance at $1,820.

Jordan Roy-Byrne, CMT
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