Platinum prices have recently been coming under downside pressure over fundamental issues, as the spread of the coronavirus hurts demand for jewellery and automobiles.
Platinum price analysis shows that the technical picture is also worsening, and the metal could extend its recent losses towards the $850.00 level before staging a meaningful recovery.
Platinum medium-term price trend
Platinum is coming under increasingly downside pressure, following its recent aggressive reversal from just under the $1,050 resistance level.
Worsening fundamentals are currently causing problems for platinum, while the technical outlook for metal appears more bearish below the $960.00 level.
Platinum technical analysis shows that a loss of the metal’s 50-day moving average, around the $960.00 level, could provoke a deeper decline towards the $850.00 level.
The $850.00 technical area has pockets of previously untested demand, and is also the location of platinum’s trend-defining 200-day moving average.
It is worth noting that the daily time frame shows that the latest drop may just be corrective in nature, as a large inverted head-and-shoulders pattern was formed during the metal’s recent advance to the $1,040 level.
Platinum short-term price trend
Platinum technical analysis shows that the metal has recently turned bearish over the short term for the first time since December of last year.
The short-term technicals surrounding the metal are also showing that a descending triangle pattern has formed across the lower time frames.
The pattern highlights that a sustained loss of the $950.00 level could cause platinum to decline in value by around $90.00, taking the metal towards the $860.00 level.
It is noteworthy that a large head-and-shoulders pattern will form across the lower time frames if platinum price does see a drop towards the $860.00 level.
The head-and-shoulders pattern indicates that platinum could see a steeper decline towards the $600.00 level.
Platinum technical summary
Platinum technical analysis highlights that a major bearish breakdown below the $950.00 level could result in a rapid decline towards the $860.00 to $850.00 technical area.