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Platinum and Palladium: Nice Additions to Your Precious Metals Portfolio

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As well, these metals suggest higher prices across the precious metals sector.

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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 (NYSEARCA:PPLT).]



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 (NYSEARCA:PALL).



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.

Summing up: 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.

Twitter: @SunshineProfits
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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