Platinum likely to continue outperformance as silver and gold flounder

Precious metals may have lost a bit of their shine of late, yet platinum provides the market leader as traders prepare for the grand 2021 reopening.

Platinum weakens amid wider precious metal decline

Platinum is on a rare down day today, with a wider pullback in precious metals driving weakness for this recent outperformer. The sector has been particularly interesting over the past year, with global monetary and fiscal expansion driving upside given the role as an inflation hedge. That driver of interest for the sector is unlikely to go away, with the ‘reflation trade’ expected to fully kick in this year.

The Covid-19 pandemic has been deflationary for the most part, yet this year could see that shift as major stimulus efforts are accompanied by a short rise in commodity (input) prices. The Federal Reserve (Fed) December forecast points towards a significant move back towards the 2% target rate over the course of this year, with many seeing that as a potential reason to get long precious metals.

Fortunately for some of these precious metals, we do not only see them through the lens of a haven or inflation play, with silver and palladium in particular gaining some traction from the wider surge in commodities.

Huge Chinese demand growth in 2020 is likely to continue through this year, with the reopening likely to ramp up that consumption driver for commodities. With that in mind, particular interest lies in the likes of platinum which is expected to benefit from a return to pre-pandemic levels of automotive, jewelry and industrial demand.

Platinum, gold and silver price technical analysis

The chart below highlights why were particularly interested in this asset, with the gold/platinum and silver/platinum both falling sharply over recent months. That platinum outperformance could continue as we move forward, with clear evidence that this is the favoured market of the three of late.

That leads us to the platinum chart itself, with the pullback seen today bringing a potential buying opportunity. The four-hour chart highlights the recent leg higher, with the price falling back into the 61.8% Fibonacci support level.

A break below the $1211 support level negates this current intraday trend, bringing a potential wider retracement of the rise from $1077. Until then, further upside looks likely for this precious metal outperformer.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Trade on commodities

Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1

  • Wide range of popular and niche metals, energies and softs
  • Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
  • View continuous charting, backdated for up to five years

1In the case of all DFBs, there is a fixed expiry at some point in the future.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.