CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Platinum

Market Opportunities - 29/04/2022

29 April, 2022

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible opportunity for profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

Platinum weekly uptrend opportunity based On 1.00 Lot Calculation:

PLATINUM USE AND MARKET SHARE:

  • Platinum is mostly used in catalytic convertors (circa 40%) by car industry to reduce harmful gas emission, while tightening regulation is forcing auto makers to put more of Platinum into each vehicle, which in turn could keep demand outlook positive. Platinum has also found use in the jewelry sector (circa 32%). Industrial use of Platinum takes up to 21%. Platinum has been also used as an inflation hedge investment (3%) through the years, and as such remains vulnerable to changing global interest rates and global inflation.

  • MARKET SHARE (PRODUCERS): South Africa is the largest producer holding 7.0% of the markets, while Russia is the second largest with 12- 13% of the markets. Zimbabwe is third on the list with 8.2% of the global production.

  • MARKET SHARE (CONSUMERS): China is the largest Platinum consumer with 28%, while Europe is second in line with 25%. North America (USA) takes up to 20%, while Japan stands at 15%.

  • EXPECTATIONS FOR PLATINUM IN 2022 COMPARED TO 2021 (SOURCE: WORLD PLATINUM INVESTMENT COUNCIL): Demand for Platinum in the Auto industry to go up by 11%, while industrial demand should rise by 27%. Demand in the jewelry sector should increase by 5%. Investment demand to be up 29% in 2022 compared to 2021.

RUSSIA- UKRAINE WAR

  • RUSSIA- UKRAINE WAR: President Vladimir Putin announced an attack on Ukraine on February 24, days after he recognized two breakaway regions of Russia’s neighbor as independent. Attacks are occurring in Kyiv, Odessa, Mariupol and other locations in Ukraine. Russia faced tough sanctions by the EU and the US and other allies, which brought the country to the brink of sovereign debt default. Russia is the second largest Platinum producer in the world providing around 12% of global supply, only behind South Africa which provides 70% of the global supply.

  • BREAKING NEWS (APRIL 8): THE LARGEST PALLADIUM AND PLATINUM MARKET IN THE WOLRD SUSPENDS DELIVERY OF RUSSIAN REFINED PALLADIUM AND PLATINUM. This could limit the access to the Palladium and Platinum market, which has been already under pressure due to Russia- Ukraine war and it could result in higher Palladium and Platinum prices. Russia is the second largest Platinum producer in the world providing around 12% of global supply and the largest Palladium producer in the world providing around 45% of global supply.

ANALYSIS AND EVENTS:

  • EVENT: FEDERAL RESERVE INTEREST RATE DECISION (MAY 4, WEDNESDAY): The US FEDERAL RESERVE raised interest rates by 0.25% from 0.25% to 0.50%.

  • HIGH INFLATION (USA): MARCH INFLATION CAME IN AT 8.5% (VS. 8.4% EXPECTED) WHICH IS THE HIGHEST SINCE 1982. High inflation should boost demand for Platinum as an asset that can fight inflation.

  • EXPECTED SWITCH FROM PALLADIUM TO PLATINUM: The markets expect the auto industry, especially in China, to continue to switch from Palladium to Platinum at an accelerated rate in 2022.

  • ANALYST OPINION (UBS): UBS sees platinum prices rising to $1,150 per ounce as the global chip shortage leads to a significant restocking of cars. Bank of America forecasts 1338 in 2022.

Platinum, April 29, 2022
Current Price: 920

Platinum

Weekly

Trend direction

UP

Resistance 3

1100

Resistance 2

1030

Resistance 1

980

Support 1

870

Support 2

850

Support 3

830

Example of calculation base on weekly trend direction for 1.00 Lot1

Platinum

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

18,000.00

11,000.00

6,000.00

-5,000.00

-7,000.00

-9,000.00

Profit or loss in €2

17,047.55

10,417.95

5,682.52

-4,735.43

-6,629.60

-8,523.78

Profit or loss in £2

14,339.66

8,763.12

4,779.89

-3,983.24

-5,576.53

-7,169.83

Profit or loss in C$2

22,915.44

14,003.88

7,638.48

-6,365.40

-8,911.56

-11,457.72

1. 1.00 lot is equivalent of 100 units
2. Calculations for exchange rate used as of 09:00 (GMT+1) 29/04/2022

Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Client Manager regarding their use.

  • You may wish to consider closing your position in profit, even if it is lower than suggested one

  • Trailing stop technique can protect the profit – Ask your Client Manager for more detail

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