Platinum’s Insightful Signal (Spoiler Alert: It Could Be Signaling A Top In Gold & Silver)

It appears the next local top is just around the corner, or that it’s already in. Here’s why…

by Przemyslaw Radomski via Sunshine Profits

Do you remember about platinum? You know, the other white metal that has fallen behind gold and that is being outperformed by its smaller (?) brother – palladium. Platinum is special because it’s the weakest part of the precious metals sector. And the weakest part of a given market tends to act quite specifically at tops, so it’s analysis could be particularly useful at times. Especially at times like this, because it appears that the next local top is just around the corner, or that it’s already in.

By “acting specifically” we mean that it catches up with the rest of the market and does so with exceptional strength. This is most likely due to inexperienced investors entering the market close to the top. They are likely to buy whatever seems cheap regardless of its fundamental situation – after all, there might be a good reason why it’s cheap. In case of platinum, it’s the decline in the use of diesel engines, which means lower demand for platinum as it is used in catalysts of diesel-powered cars.

Platinum’s Attempts to Rally

In the last several months we saw two major short-term upswings in platinum price and now we see the third one. Both previous cases were platinum’s attempts to break above the declining red resistance line and they both failed. In both cases, the volume was relatively big, but it was much bigger in the first case.

How did gold, silver and miners respond? With declines. The times when platinum showed exceptional short-term strength were good times to prepare for lower prices. The situation when platinum rallied on huge volume was the situation when the top in gold was most profound – that was THE 2019 top (most likely as the year is not over yet). That’s important, because the volume was very big once again this time. This increases the odds that the precious metals market is forming a short-term top right now and that the next short-term move will be to the downside.

The full version of this analysis isn’t merely about platinum though. There, we cover the immediate action in gold, silver and the miners. And of course, we update you also on the USD Index and the closest short-term turning point in gold. You’ll also find there the key factors at play and the targets of our promising short position. We encourage you to join our subscribers and reap the rewards. Subscribe today!