Platinum Cleared The "Launch Pad" For Palladium

In a previous post titled "Platinum Outshines Palladium, Yet Both Offer Opportunity," I discussed potential opportunities for investors to buy into these two white metals.

The fact that platinum was chosen over palladium by three out of five readers in the ballot was not surprising. The platinum/palladium ratio and the chart setup for platinum futures were both supportive of the title's argument.

Let’s check on what has changed in one month. We'll start with platinum futures.

Platinum Futures Daily

Source: TradingView

The price of platinum futures has been following my predetermined path with remarkable accuracy. I kept the previous annotations for you to see it.

The forecast that the price would reverse around the "golden cut" 61.8% Fibonacci retracement area proved to be successful, as the price tested the support twice and held. Subsequently, the futures price mimicked the trajectory of the blue zigzag, moving to the upside. Continue reading "Platinum Cleared The "Launch Pad" For Palladium"

Platinum Outshines Palladium, Yet Both Offer Opportunity

Almost four years ago, I wrote about the supremacy of palladium over platinum, and we watched the Platinum/Palladium ratio fall below its long-term valley of 0.56 oz.

In contrast, today the Platinum/Palladium ratio is approaching a 4-year high of 0.7 oz, marking a doubling from its all-time low of 0.31 oz established in 2020.

Platinum-Palladium Ratio Monthly

Source: TradingView

On its way up, the ratio broke through a double barrier that included the 2001 valley of 0.56 oz and the horizontal resistance at the top of the range. There are no other barriers for the ratio until it reaches parity between the two metals, which will be a crucial resistance level.

This is because palladium was replaced with the cheaper platinum in the automobile industry due to palladium's abnormally expensive price.

It is estimated that the platinum substitution of palladium reached 340 koz in 2022, and it is predicted to increase to over 500 koz in 2023, more than twice the amount in 2021. Continue reading "Platinum Outshines Palladium, Yet Both Offer Opportunity"

Crude Oil vs Platinum: You Bet Right

It is just amazing how many times you guess not only the direction but also the peaks and troughs of the prices of different instruments. This is crowd-thinking or crowd-analyzing, when the winning ideas are crystallized into the major wager.

This “market distortion” was spotted in July and it was updated this September. Almost all of you were betting that crude oil and platinum would meet on the price chart again. So, here it is in the chart below.

Crude Oil VS Platinum

Source: TradingView

The magic of your major bet is right here in the making. As the oil price remains stuck in a sideways consolidation, the platinum price is taking quick steps towards "black gold".   

In September, crude oil futures completed their mission as the initial meeting point was set at $75 and the valley was at $76. Hence, the consolidation that followed gave the metal a chance to catch up.

The updated meeting point has been recalculated to be set at $62 for crude oil futures and at $1,160 for platinum futures. This could happen in an ideal situation. Historically, however, one of the instruments has often lagged behind.

Last time I updated the platinum futures chart for you and it played out well according to the bullish option.

Let me update the oil futures chart this time as it has changed a lot. Continue reading "Crude Oil vs Platinum: You Bet Right"

Crude Oil Closes the Gap

Back in July, I shared with you a chart of Market Distortion where I put together crude oil and platinum futures. I spotted a disruption of a strong correlation pattern between these two instruments that has been lasting for a quarter of a century.

That post drew your attention with strong support and feedback as readers shared their valuable comments. Below is the graph showing the distribution of your opinion on how the divergence would play out.

Ballot Votes

The majority of readers chose the option that implies the equal move in the opposite direction of both instruments to meet somewhere in between - crude oil should drop to $75 and platinum futures should rocket to $1,200. The second largest bet was on the widening gap.

I prepared for you an updated chart below to see what happened after two months.

Oil Futures vs Platinum Futures Monthly

Source: TradingView

None of the bets have hit it right, although your main choice is still the closest. Indeed, the crude oil futures (black line) did its job fully to close the gap as it almost touched the $75 area. The lowest handle hit was $78 so far.

The counterpart, as it often happens in human relationships, did not meet the other part halfway. The platinum (green line) is still weak as it can’t raise its head to the upside.

Should crude oil do the job for both and drop even lower like a rock to catch up with the metal? Or is platinum quietly accumulating power for a rally? Continue reading "Crude Oil Closes the Gap"