Miners Back To Work, Platinum Tanks
?? Fundamentals
Platinum futures tumbled for the second consecutive session, after workers at Lonmin’s South African mine reached an agreement. The mine accounts for 10% of global Platinum production. QE3 and worker turmoil have been major reasons for the sharp rise in Platinum prices. South Africa, in particular, has been plagued with labor issues akin to South American Copper mines.Platinum holdings by investors have risen to record levels, suggesting the market may be a bit overbought, fundamentally speaking. Given its industrial nature, Platinum could be seen as more sensitive to economic data than other precious nature.
?? Technical Notes
Turning to the chart, we see the October Platinum contract appearing to form a key reversal between Friday’s and Monday’s candles. Yesterday could be seen as a follow-through day. This suggests that prices may correct further in the near -term. On the downside, support could be seen at 1550 and 1500. The sharp sell-off over the past two sessions has brought the SRI back to neutral territory from extremely overbought levels.
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