Platinum price at the point of transition, here’s what to expect

Unlike the energy market, the platinum price is not directly impacted by the blockage at the Strait of Hormuz and the overall US-Iran war. However, with oil being one of the key drivers of the global economy, heightened inflation concerns are weighing on the metal. Investors are increasingly betting on a hawkish Fed. Similar to other precious metals, platinum thrives in an environment of lower interest rates.

Nonetheless, its demand/supply dynamics continue to offer support to prices. Besides, the ceasefire agreement between the US and Iran, though fragile, has fanned some optimism into the financial markets. Investors are now keen on the weekend negotiations and US CPI data slated for release on Friday.

Platinum price approaches crucial support 

On Thursday, platinum price held steady above the support level of $2,000 as its demand/supply dynamics offset the geopolitical risk. The US-Iran war and subsequent energy shock have been weighing on precious and industrial metals. Investors are concerned of a possible stagflation that would push the Federal Reserve and other major central banks to hike interest rates. 

On early Wednesday, platinum rallied to a three-week high after news of a two-week ceasefire. The agreement eased inflation concerns, bolstering precious metals that thrive in an environment of lower interest rates. However, Iran has since accused the US of violating the ceasefire agreement. 

According to Iran’s parliamentary speaker, the US violated three of the ten-point proposal that formed the basis of the ceasefire. This includes Israeli attacks on Lebanon, denial of the country’s right to enrich uranium, and the entry of a drone into Iranian airspace. He therefore sees a bilateral ceasefire are being “unreasonable”. 

On its part, the US, through Vice President JD Vance has stated that “ceasefires are always messy”. He added that the agreement did not extend to Lebanon, and that the US will not allow Iran to enrich uranium. Vance will lead the US delegation in negotiations slated for the weekend in Pakistan.

Investors are keen on the fragile ceasefire agreement and its impact on the market sentiment in relation to inflation. Chaos at the Strait of Hormuz and the subsequent surge in inflation concerns have shifted the market’s expectations on the Fed’s policy. 

Meanwhile, the US CPI data is set for release on Friday. Inflation is expected to have accelerated in March amid the conflicts in the Middle East.

Platinum price technical analysis

Platinum price chart | Source: TradingView

On Thursday, platinum price hit the months-long bullish trendline for the first time since dropping past it three weeks ago. The optimism ignited by the US-Iran ceasefire agreement gives the bulls a chance to bolster the metal back above the previously steady support. 

However, the resistance level of $2,131 is worth watching in the immediate term. That zone coincides with the point of convergence formed when the 25 and 50-day EMAs formed a bearish death cross pattern in mid-March. 

Amid the fragile ceasefire, investors are keen on the negotiations expected in Pakistan over the weekend. Subsequently, platinum price may enter into range-bound trading, with $2,000 remaining a steady support. 

The entry of enough buyers to break past the resistance at $2,131 and back above the crucial bullish trendline will place the next target at $2,200. On the flip side, a pullback below that range will likely activate the lower support at $1,915.