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Platinum: Watch this 13 out of the last 15 years seasonal trend

Commentaries & Views

Metal markets have been on the move for the better part of the last month as traders, investors, and other market participants look for ways to diversify their portfolios in times of geopolitical turmoil. Though we have seen a heavy round of profit-taking pressure prices over the last week but based on seasonal tendencies, there may be some light at the end of the tunnel for those holding or trading platinum. Technical and fundamental analysis are the two most common ways to analyze a market, and when used together and matched up, they can provide excellent guidance. Add in a seasonal trend that aligns with the fundamentals and technicals and you have got yourself a good-looking trifecta and a high conviction trade setup. We touched on the fundamental backdrop for metal markets in the opening, now we will go over the technical landscape and the seasonal trend for platinum that has played out for 13 of the last 15 years.

Below is a daily chart of July platinum futures where we have labeled support and resistance levels. You can see that the market stalled out against trendline resistance on March 8th and 9th, which sparked a selling spree, spurred by long liquidation. This selloff took us back into "No Man's Land", which was a consolidation zone from the back half of January to the first half of February. The market tested and held the low end of that zone, along with trendline support that stems from a double bottom low on December 15th. If the market can chew through and achieve consecutive closes above the upper end of "No Man's Land" it could encourage momentum traders to step back into the market, opening the door for a potential run back at trendline resistance.

So, now that we have a potentially bullish fundamental and technical backdrop, we can look to see if there are any seasonal tendencies that align. In this case, it's a yes. Over the last 15 years, July platinum futures have rallied between March 28th and April 18th. In the chart below we have outlined this timeframe, using the 5, 15, and 30-year price average as a visual of the seasonal trend.

Occasionally seasonals can be distorted by a massive move during one or two years. Still, it has remained fairly consistent in this particular example, which you can see in the year-by-year breakdown below.

Individually, fundamentals, technicals, and seasonality are good, but they can be great when they all line-up. We have recently partnered with MRCI, which specializes in analyzing seasonal trends. Each month there are approximately 30 monthly historical trading strategies for individual commodities and commodity spreads from various major commodity markets - all at least 80% historically reliable with specific entry/exit dates. You can register for a free two-week trial of Seasonal Trends here: Seasonal Trends

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.