Platinum Technical Analysis - Platinum Trading: 2022-10-27

It is possible that the Fed will pause in raising rates. According to CME FedWatch the Fed has a 96% chance to rise rates by 0.75% to 4% from the current 3.25% at its meeting on Nov 2nd. This will be the 4th consecutive 0.75% increase. Afterthat at the meeting on December 14th the rate may be increased by 0.5% or even by 0.25%. CME FedWatch estimates such probability at 47%. Previously, the majority of the Fed representatives expressed the opinion that in general the rate can be raised only up to 4.75-5%. Afterthat it should stay on that level until inflation falls to the target level of 2-3%. We remind that the inflation in the US has already begun to decline. In June it was 9.1% y/y, and in September - 8.2% y/y. October data is going to be on November 10th. Theoretically, too high Fed rate may hold back economic growth in the US. The US 10-year Treasury note yield dropped to 4.023% on Wednesday (October 26) from 4.338% on Friday (October 21). The decline in the yield of US government bonds may support the growth of quotations of all precious metals. An additional positive note for platinum may be the forecast of the World Platinum Investment Council (WPIC), which expects a global shortage of this metal for 4 years in a row 2023/2026. That can be due to a significant increase in demand in the automotive industry and for investment purposes. We should note that the WPIC forecast assumes a relatively modest reduction in platinum production in Russia - by only 6% in 2023/2026 compared to 2022. Theoretically, in the event of tougher anti-Russian sanctions, the production of this metal may decrease more significantly. The share of Russia in the world production (refined mine production) of platinum is approximately 11%.