Platinum futures were trading slightly higher during Tuesday’s session; with the metal finding some technical support. Recently, platinum futures have been oscillating between slight gains and losses and were last up just 0.06% at $934.10 per ounce. The short term (daily) moving averages had the commodity rated as Buy, and technical indicators had them rated as Strong Buy. Longer term; however, a technical analysis shows downside pressure. The monthly moving averages and technical indicators both show a Strong Sell.
The entire precious metals complex is feeling some pressure due to investors taking a preference for riskier assets while the US dollar continues to hold steady in anticipation that the Federal Reserve will hike interest rates this week. Gold and platinum are feeling more pressure with “industrial” metals silver and palladium seeing more upside. While platinum is also an industrial metal, its market fundamentals are limiting price gains.
Earlier in the year, the World Platinum Investment Council said that the platinum market deficit will fall to its narrowest since 2011 in 2017 due to a drop in investment interest and a declining share of diesel vehicles in the European car market. The platinum market will be in a small, 100,000 ounce deficit in 2017. This follows the predicted deficit of 170,000 ounces in 2016, which was greatly reduced from the WPIC’s earlier forecast for a 520,000 ounce deficit in 2016.
While the platinum market deficit will tighten in 2017, South Africa’s Platinum Group Metals production is declining. South African PGM production fell by 5.7% year on year and 4.5% month on month in October, but this is doing little to impact prices. The decline in production is likely due to platinum prices not being enough to support some of the expensive South African platinum production.
Source: Economic Calendar