Platinum Breaks $1,000 on Big Rally, And What Is Next
The comments below are an edited and abridged synopsis of an article by Technical Traders Ltd.
Gold, silver and platinum have shown moderate upside price trending over the past 20+ months, while rhodium and palladium have skyrocketed higher. Why isn’t there a rally in gold, silver and platinum?
The reality is that we are seeing a similar price rally in rhodium and palladium as we saw in 2004—2008, just prior to the global credit crisis.
Platinum rallied in early 2000, peaking in 2007 (just before the US stock market peak). Since then, wild price rotation and a moderate reversion to levels near $1,000 have set up a massive basing pattern.
Gold, like platinum, began an incredible upside price rally in early 2000 that continued until 2010. The two may be setting up for another huge rally, should rhodium and palladium extend their rallies even further.
The rhodium/palladium rallies are early warning signs that can’t be overlooked by skilled traders/investors.
Platinum’s recent breakout falls into the same category as the late 1998 rally, which occurred as the dot-com rally began to overextend. This shift into high-value risk protection occurred as investors’ fear levels increased in the late 1990s.
Platinum’s current move above $1,000 suggests a new upside price rally is taking place after an extensive basing pattern (2015 to now). Should it go above $1,200, a new technical bullish trend will be confirmed.
Platinum’s rally could become the catalyst for a much bigger move in precious metals. Platinum’s 1997 rally began an upward move of nearly 600% over the next 10 years. A similar move today would put platinum near $6,000—$7000, and gold at $3,200+.
Platinum’s rally will continue as valuations in the global markets push higher. Fear is creeping back into the markets as investors wait for a price reversion event. Gold and platinum are acting as they did from 1995—1997. Rhodium and palladium are a mix of 1995—1997 and 2000—2007. Overall, their moves are similar to ‘peak everything’ bubbles.
Watch how this plays out over the next 12+ months. Gold and silver should begin to move higher as platinum extends its rally. Fear is starting to enter the markets, as traders and investors believe a reversion event is setting up.