Platinum price rallied to a fresh 11-year high of $1,433 on Wednesday before pulling back on Thursday. At the time of press, the precious metal was trading at $1,372.
On the one hand, the easing of geopolitical tensions in the Middle East has heightened the risk appetite while lowering the demand for safe-haven assets.
Even so, a weaker US dollar and a shift from the more expensive gold have bolstered platinum price by over 50% year-to-date. In the short term, investors will be eyeing the US trade talks and economic data for signs on the health of the country’s economy and timing of the Fed’s interest rate cuts.
Weaker US dollar offsets eased safe-haven demand
The demand for safe-haven assets has decreased following eased geopolitical tensions in the Middle East. Indeed, the risk appetite has improved, with the fear & greed index hitting extreme greed of 78 compared to the previous session’s greed level of 63.
Platinum price remains on an uptrend as the precious metal has become a popular alternative for the more expensive gold. It has become particularly popular for jewelry and investment. Besides, the steady hybrid vehicles’ demand growth is set to buoy platinum prices beyond 2025.
Additionally, a struggling US dollar has been a bullish factor for the precious metal and other dollar-priced assets. Despite the better-than-expected nonfarm payrolls data released on Thursday, higher bets on a Fed rate cut being on the horizon continue to weigh on the greenback.
Notably, there has been a growing conviction that the Federal Reserve may begin cutting interest rates as soon as July. Even so, the central bank has maintained a rather neutral stand as they remain fixated on the economic data. Earlier in the week, the central bank Chair, Jerome Powell, indicated that the Fed would have started its rate cuts by now were it not for President Trump’s aggressive tariffs.
He stated, “In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs.”
In his address, Powell did not entirely dismiss a July rate cut but rather insisted that the incoming data will be the bank’s guiding light. Easing of the monetary policy would weigh on the US dollar while boosting platinum price. However, signs of economic instability would likely curb the gains.
Platinum price technical analysis
On Wednesday, platinum price hit the border of the overbought territory after rallying to a fresh 11-year high. However, with profit-taking and US dollar gains, its RSI eased to 63 on Thursday.
Despite this, the precious metal remains on an uptrend; trading above the 20 and 50-day EMAs. In the short term, it may be range-bound as the bulls strive to defend the support at $1,350. Even with a further pullback, I expect platinum price to hold steady above the 20-day EMA at $1,290.
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