Market Insights

Precious metals like gold have been rallying, and yesterday buyers turned to platinum.

Futures on the precious metal (@PL) rallied 5.4 percent on Tuesday after Bloomberg News said that Chinese imports hit their highest level in a year. It was their biggest one-day gain since July 2020. The report added that retail buyers in the Asian country have targeted platinum over the last month as an alternate to gold. Long-term supply and demand dynamics also suggest a deficit in coming years, according to Bloomberg estimates.

Platinum is similar to silver, with industrial applications and some use in jewelry. It has a much smaller market for investment purposes compared with gold and silver. It’s lagged gold for years, which may prompt some investors to view it as a value opportunity compared with the yellow metal. For example, one ounce of platinum cost about twice as much as gold between 2002 and 2006. It’s now about one-third the value of gold, according to TradeStation Data.

Platinum futures (@PL), daily chart, with select patterns and indicators.

Some chart watchers may also see potentially bullish patterns in CME’s futures tracking the metal. @PL hit a five-year low in April as trade wars triggered a wave of volatility. It then stabilized and broke a falling trendline yesterday. Prices are near peaks from July, October and January but have mostly drifted lower since 2021. Could further upside trigger interest for trend followers — especially with gold established at new highs above $3,000?

CME’s platinum futures track 50 troy ounces of the metal.  They expire monthly and are settled physically. More information is available on TradeStation’s futures margin page and on CME’s website. July is the expiry date of the current contract (PLN25).

Security futures are not suitable for all investors. To obtain a copy of the security futures risk disclosure statement visit www.TradeStation.com/DisclosureFutures.