PLATINUM TODAY – Support found ahead of $900/oz

Short Term: Medium Term: Long Term: Resistances: R1 921 Recent DTL R2 926 Mid-October lows R3 940 20 DMA R4 950 40 DMA R5 1015 200 DMA R6 1021 Nov 9 peak R7 1038 August peak R8 1090 High (May) R9 1059 UTL Nov/Jun low R10 1176-92 Late 2014 low/Apr-May high R11 1163 DTL (Feb ’13/Jul ’14 highs) Support: S1 1152 UTL Dec 3/Apr 5 low S2 1076 50% retracement Jun>Aug rally S3 1045 UTL Nov 2015/Jun lows S4 1029 100 DMA S5 1015 200 DMA S6 950 40 DMA S7 957 61.8% retracement Jan>Aug rally S8 951 50% Fibo Jan-May S9 940 20 DMA S10 945-947 Jul/Aug 2015 lows S11 929 Support/resistance jul/aug 2015 Feb-Apr 2016 S12 910-880 Support/resistance Oct 2015-Feb 2016 S13 811 Low so far Stochastics:Bearish Legend: Fibo = Fibonacci retracement level BB = Bollinger band RL = Resistance line SL = Support line UTL = Up trend line H&S = Head-and-shoulder pattern Technical Comment Analysis Platinum is attempting to form a base around $900 per oz after support around the mid-October low of $926 failed. Dip-buying interest continues to provide modest support, as implied by longer lower shadows on the daily candlestick chart. The stochastics remain bearish, though, amid persistent offers. Stronger support is expected at $880-900 per oz from the October 2015 lows. Platinum has formed a DTL, which stands at $921 and is providing immediate resistance. Further resistance is seen from the 20 and 40 DMAs at $940 and $950 per oz respectively. Macro factors Platinum continues to grapple with fallout from the Volkswagen emissions scandal last year – the mayors of Paris, Mexico City, Madrid and Athens have pledged to ban all diesel vehicles by the middle of the next decade. ETF holdings remain stable for now and, unlike palladium, have not suffered from stale long liquidation. Holdings total 2.35 million oz compared with 2.22 million oz at the end of September after buying interest returned late in October. But the fact they have fallen around 64,000 oz in the year to date does little to signal a bullish stance among investors.  The global platinum market will record a 520,000-oz deficit in 2016, according to the latest Platinum Investment Council forecast – deeper than the 455,000-oz deficit it forecast in May. Total supply is now seen falling 2% to 7.73 million oz – the WPIC lowered its expectations for recycling levels due to subdued autocatalyst and jewellery scrap sales. It also sees demand edging up to 8.25 million oz – firmer jewellery and investment demand will offset slower demand from industrial applications, owing to slower usage from the petrochemical sector. Demand for autocatalysts is seen slowing marginally – falling market share for diesel vehicles in Europe will negate overall growth in vehicle sales globally. The Platinum Investment Council will publish its third-quarter statistics and latest 2017 forecasts tomorrow. Conclusion Platinum is attempting to stabilise – we feel downside pressure may be limited, with prices having returned to an area of stronger price support between $900 to $880 per oz. But whether platinum has the ability to rebound is likely to depend on wider market drivers, with US payrolls data and elections in Europe this weekend likely to be key directional drivers. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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