The prices are not collapsing yet. They are not soaring either – even though the USDX moved briefly to new lows.
Even platinum – that momentum king of the previous days failed to move to new highs.
And yes – it means something important. Please take a look below:
The tiny breakdown to new lows in the USD Index was invalidated almost immediately. Did the technical picture change based on that? Well, the invalidation was a buy signal, so… One could say that it improved on a short-term basis.
On a long-term basis, it’s as favorable as it’s been last month – extremely so.
The 38.2% Fibonacci retracement based on the 2008 – 2022 rally, the 61.8% retracement based on the 2017 – 2022 and 2020 – 2022 rallies together create a super-strong support level.
This, plus the RSI below 30 and while forming a double-bottom implies that this is a major buying opportunity of medium- or long-term importance.
The sentiment is terrible, just like it was the case in 2008 and 2011. Gold, silver and platinum soared – also just like in those years as well. And they all appear to have topped based in different indications.
I wrote quite a lot about platinum, so let’s take a look at today’s move higher.
The platinum moved close to its yesterday’s intraday high. How is this bearish? Well, given today’s move lower in the USDX, it should have moved to new highs if the strength was just “normal”. And given its recent momentum, it might have even soared. The lack of new gains is actually a sign that the momentum is gone.
Also, please note that platinum re-tested its high in practically each of its recent major tops.
I’ll now zoom in and show you what happened on previous occasions that I marked with dashed lines.
Immediate double-top.
Immediate double-top in 2019 and a multi-top in 2020.
Double top in 2021 with the second top being below the first one.
So, what we see today is perfectly within the historical norms – at least in case of platinum. And the implications are just like they were before today’s session – bearish.
[The full version of today’s analysis includes also more detailed analysis of gold, silver, and mining stocks (as well as other stocks).]
Thank you for reading my today’s analysis – I appreciate that you took the time to dig deeper and that you read the entire piece. If you’d like to get more (and extra details not available to 99% of investors), I invite you to stay updated with our free analyses - sign up for our free gold newsletter now.
Thank you.
Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief