Monday was a good day for the whole precious metals sector – all important assets rallied sizably with the USD Index declining 0.38 (0.47%). It seems that the brief consolidation that we saw in the last couple of days is either over or almost over and the whole sector is poised to move higher.
In our last essay (see Gold and Silver Stocks: A Dramatic Change in Fundamentals or a Short-Term Anomaly?
) my firm wrote a lot about the importance of diversification, and we believe it is a good idea to continue this thread a bit more in today’s essay as well. And this is why we would like to draw your attention to two precious metals that seem to be in the shadow of gold and silver, as we think they provide good investment opportunities. So, in order not to put all our eggs in one basket, let us move on to the technical part of today’s essay and have a look at platinum and palladium that didn’t lag behind the more renowned precious metals Monday. We’ll start with platinum’s short-term chart (charts courtesy of http://stockcharts.com
). [Most retail investors would have exposure to platinum in a fund, such as ETFS Physical Platinum Shares
In the chart, we see that prices have broken above the declining resistance line. We saw three consecutive closings followed by a move back to this line, which was immediately followed by a pullback. And yesterday’s price action is reassuring with platinum closing at almost $1584. At this time, the breakout has been confirmed and higher prices should now be expected.
Let us now move on to the second hero of today’s essay – palladium. The chart below references ETFS Physical Palladium Shares
In this chart the situation looks promising as well. Prices not only moved back above the declining long-term resistance line but also moved above the short-term declining resistance line. Therefore, the short-term implications are also bullish here which was further confirmed yesterday, as the ETF closed at over $63.
Both platinum and palladium can be seen as a decent addition to a precious metals investor’s portfolio, as their upside potential is tempting and they are good for diversification purposes. Moreover, these metals suggest higher prices across the precious metals sector.
For the full version of this essay and more, visit Sunshine Profits' website.
No positions in stocks mentioned.
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