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Asset inflation has been the main theme of markets for the past few weeks, with stocks, oil and precious metals rising as the US dollar and bonds have been weaker. This is due to the massive and concerted money printing efforts by global central banks and as the recovery picture among G-20 and emerging market economies become more certain.
Among precious metals, mainstream media has been more focused on Gold and Silver as inflation plays. But how are the lesser known precious metals, such as Platinum and Palladium doing?
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In the comparative performance charts below, one can see the out performance of other precious metals for the past six months, despite all the hype surrounding Gold. Palladium has done the best among the four precious metals, up about 65%. Silver and Platinum are up a similar 37%, while gold is up only 18%.
While all precious metals can be good plays on inflation, the distinguishing factor might be their potential uses. Besides also being used in jewelry, both Platinum and Palladium have industrial uses, more importantly as catalytic converters used in automobiles.
Here we take a look at the individual charts of Platinum and Palladium.
Platinum is locked within a rising channel trading range, and is currently somewhere in the middle. Momentum has waned a bit with the MACD flattening and looking to turn down. A good level to pick up (or add to) exposure to Platinum is at the $1,315 to $1,330 level, which is somewhere in between the rising channel trendline and 32-day moving average support.
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Meanwhile, Palladium has the strongest chart of all precious metals. Momentum has not waned as it doesn’t show any divergence. We are however at the upper end of a similar rising channel range. A good level to pick up this metal is at the $308 to $312 range.
All in all, while precious metals should remain a good long-term bet, it is important to monitor signals across the sector short-term, as all of them are showing weakening momentum or at are the higher end of ranges (less attractive risk: reward). This is why it is important to identify strong support levels from which one could easily scale into these precious metals.
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Carter Thompson
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This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our .
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