The post-pandemic economic rebound, government infrastructure spending and the green energy plan have driven the rally for industrial and precious metals in 2021. As governments around the world seek to curb climate change, demand for platinum could increase. The metal is used in catalysts in diesel vehicle engines to reduce carbon emissions.
The World Platinum Investment Council predicts that demand for the precious metal will increase by approximately 254,000 ounces or 3% in 2021. This will result in a shortfall of approximately 60,000 ounces. The market has already been in deficit for two consecutive years previously. The spot price of platinum rose to over $ 1,300 in February in response to the supply shortfall. Below we will take a look at the technical outlook for the precious metal.
Platinum Daily Elliott Wave Chart (PA_F)
The rally on March 16, 2020 takes place in the form of a 5-wave Elliott Wave structure. From the March 16 low, wave ((1)) ended at 1035.5 and wave’s pullback ((2)) ended at 821.3. The metal then extends higher in wave ((3)) towards 1348.2, and the pullback in wave ((4)) ends at 1111. The metal must still break above the wave ((3) ) to avoid a double wave correction ((4)). In the near term, lows should find support in swing 3, 7 or 11 and while the pullback remains above 1111 expect Platinum to extend higher in the wave ((5)) . Alternatively, in a more bullish count, the rally on 3.16.2020 may be a nest ((1)) – ((2)) – (1) – (2). In a nest, then we could potentially expand impulsively higher in wave (3) of ((3)).