Platinum Forecast – Prices Breaking Out

In my article A Simple Strategy to Buy Gold for Less Than $1000, I explained the misspricing between gold and platinum and why I felt it wouldn’t last. Platinum completed its bullish trend reversal last week and presumably started a new bull market. With history as our guide, I foresee platinum reaching parity and then surpassing the price of gold.

Historically Cheap

The platinum to gold ratio slipped to its lowest level on record reaching 0.556 in August 2019. At nearly half the price of gold – platinum was/is severely undervalued. For reference, platinum has traded at a premium to gold about 85% of the time over the last 40-years. In fact, in 2000, 2004 and 2008 platinum was more than double the price of gold.

The weekly platinum chart broke sharply above the 3-year trendline and settled above the 200-week MA (first time since 2012). That combined with record volume supports a significant breakout. Near-term, prices are coming into resistance near $1000.

Things are finally turning around for platinum. Long-term investors may want to consider buying dips into intermediate cycle lows.