Platinum Price Outlook – October 2023

“Platinum Price Outlook

After moving in a mostly sideways fashion between $880 and $950 during the third quarter of this year, platinum prices broke below the important support level of $880 at the start of October. Platinum prices are likely to spend the next few weeks consolidating, with a bias to the downside.

Prices have some support around the $840 level. Weakness in chart technicals and the ongoing United Auto Workers (UAW) strike in the U.S. are likely to put some downside pressure on platinum prices. Eskom, South Africa’s state-owned utility, also has reduced its concern of loadshedding from those that it maintained over the past few months, which is likely to place additional downside pressure on platinum prices.

On the other side of the market, there is typically an uptick in demand for platinum during the fourth quarter and into the first quarter of the calendar year, which could help platinum prices trend higher after the recent decline.

One risk to this uptick in demand comes from an unresolved UAW strike. These strikes are limited to three automakers and only to the U.S., but nonetheless any loss in demand will act as a headwind to platinum prices. That said, a majority of platinum fabrication demand in the U.S. comes from commercial vehicles, with platinum’s reintroduction into gasoline autocatalysts still playing a relatively smaller role in total demand.

As with other precious metals, a sharper move lower cannot be ruled out. However, the sharper move lower for gold and silver are predicated on stronger economic growth, which in theory should be supportive of platinum prices. Nonetheless, if such a stronger economic scenario were to play out platinum prices would initially take clues from the gold market. In such a scenario, platinum prices could fall as low as $800 before recovering.

On the upside, over the course of the fourth quarter, platinum prices have initial resistance around $1,000, which if broken could see prices rise toward $1,060.”