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Is Platinum a buy or sell in November?

By: Invezz
Is Platinum a buy or sell in November?

Platinum price is expected to continue to be supported over the long-run and could actually accelerate to the upside this November if the global situation stabilizes. Drugmaker Pfizer announced that it could have a coronavirus vaccine ready in the United States by the end of this year.

Fundamental analysis: Platinum has a very good risk/reward ratio

The price of platinum has weakened from $1009 below $830 in less than three months and the current price stands around $870. Platinum price did not advance this Monday despite the fact that Pfizer and BioNTech announced that their jointly developed COVID-19 vaccine which is effective in more than 90% of the patients.

Platinum as an investment has a much shorter history in the financial sector than does either gold or silver and more than 75% of global platinum is mined in South Africa. Platinum is about 15-20 times scarcer than gold and because of this platinum is usually tended to sell at a significant price premium to gold.

This is certainly not the case currently and the price of platinum is below the price of gold. It is important to say that during periods of economic uncertainty, the price of platinum tends to decrease because of reduced demand, falling below the price of gold, partly due to increased gold prices.

This is one of the reasons why Platinum has not seen a significant rise in price in the wake of the coronavirus crisis as opposed to other precious metals. Platinum has found strong support above the $800 level and the technical picture implies that the price may recover in the upcoming period.

If you want to invest in Platinum, the current price level represents good value for what you pay and maybe now could be a good time to buy this precious metal.

Technical analysis: Bulls are focused on breaking the resistance level at $900

The technical picture implies that the price reached the bottom, but is it ready for a rebound? Let’s have a closer look at the chart below. In my opinion, platinum has a very good risk/reward ratio on the market currently and investors in this precious stand to gain a lot more for taking a comparatively smaller risk.

Data source: tradingview.com

The current resistance levels are $900 and $950, $850 and $800 represent the current support levels. If the price jumps above $900 it would be a signal to trade platinum and we have the open way to $950.

Rising above $950 supports the continuation of the bullish trend and the next price target could be located around $1000. On the other side, if the price falls below $800 it would be a strong “sell” signal and we have the open way to $700.

Summary

In my opinion, platinum has a very good risk/reward ratio on the market currently and investors in this precious stand to gain a lot more for taking a comparatively smaller risk. It is important to say that this precious metal is different from gold or silver in terms of investment. The price of gold and silver usually rises when the economy is in a slump. Platinum price charts show the opposite – it decreases when the economy is down. This is one of the reasons why Platinum has not seen a significant rise in price in the wake of the coronavirus crisis as opposed to other precious metals. According to the rules of technical analysis, the main trend of this precious metal still remains neutral. If the price jumps above $900 it would be a signal to buy platinum and we have the open way to $950.

The post Is Platinum a buy or sell in November? appeared first on Invezz.

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