Platinum price analysis: Cautious trading and FOMO at play ahead of US CPI data

Platinum price edged higher on Tuesday while remaining range-bound ahead of the US CPI data. While investors are still cautious, the eased bets of a September rate hike have bolstered precious metals. 

In the ensuing sessions, the fear of missing out, cautious trading, and technical momentum will be at play. This will test the stability of the crucial resistance levels at $1,800 and $1,830. At the time of writing, platinum price was trading at $1,776. 

Platinum price consolidates ahead of US CPI data

Platinum price edged slightly higher amid eased bets for a September rate hike by the Federal Reserve. However, the technicals and fundamentals still point to cautious trading in the near term.

In the current week, the market’s focus is on the US inflation data for further cues on the Fed’s rate path. Investors are particularly keen on the US consumer price index (CPI) figures set for release on Wednesday. This comes days after the surprise jobs data that pushed the US dollar to its lowest level since mid-June. 

Late last week, the greenback hit a 7-week low in response to the negative surprise in the nonfarm payrolls report. The net employment declined by 23k in July compared to the expected increase of 80k. This adds to the sharp downward revision of the job gains recorded over the previous two months. 

Ahead of the US inflation data, the market appears to have scaled back on the hopes for a Fed rate hike in September. The eased bets have offered support to platinum price and other precious metals. Indeed, the fear & greed index, which tracks the market sentiment, is on the greed end of the spectrum at 65. In comparison, the index was at a greed level of 64 in the previous session and 59 a week ago. 

Nonetheless, investors remain cautious ahead of the US CPI data. The market expects figures that will show inflation cooling off abit. With the softening headwinds, platinum price will likely trade sideways as the bulls gather enough momentum to break crucial resistance levels. 

Platinum price technical analysis 

Platinum price remained consolidated early on Tuesday as investors await further guidance from this week’s US CPI data. Despite the slight easing, it remains close to the 7-week high hit close to a week ago. 

On the one hand, the fear of missing out from a possible breakout is offering support to the asset. However, investors appear reluctant to place huge bets ahead of the crucial inflation numbers.

A look at its daily trading chart points to sideways trading in the immediate term as $1,790 remains a strong resistance level. This places the trading range at between that resistance level and the support along the 50-day EMA at $1,707. 

While a breakout is likely, the technicals point to stable resistance. For instance, the medium-term 50-day EMA remains above the short-term 25-day EMA since the formation of the bearish death-cross pattern in mid-March. Besides, at an RSI of 59, the expected gains may be curbed at crucial resistance levels. 

Beyond the current resistance level of $1,790, the bulls will be eyeing a move above the psychologically crucial zone of $1,800. However, the possible gains will likely be curbed at $1,830. 

On the flip side, a decline below the range’s support level of $1,707 may activate the support along the 25-day EMA at $1,675 or lower at $1,630.