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Statistical and technical analysis of Platinum

Platinum erased all this year’s gains. Will gold and silver help it to move higher again?

This precious metal declined dynamically in March and the free fall continues this month. However, it is currently in an important zone again. The current price of XPT/USD – Platinum Spot US Dollar is 954 (April 07, 2022). So, let’s move on to statistical and technical analysis.

STATISTICAL ANALYSIS

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.04% and -1.08%, respectively. The estimated daily return in both directions based on their probability of occurrence is 0.53% and -0.51%. Today´s return was 0.05%, which is well below the first standard deviation. Our scoring is currently neutral (0) for the month-on-month change and 0 for price indexation. Both scorings range from -3 up to 3 and are currently in the extreme downward phase of the cycle. The development of the estimated cycles based on our analytical system is shown in the following chart.

Platinum daily price indexation

Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. As we can see in the chart below, bearish sentiment currently supports all MAs. In the case of growth, monthly and 6-month MAs can be the price resistance.

Platinum daily price development

Source: WALFIR

Since our last analysis, we have witnessed more upward trends, although the market price is lower. They did not exceed 5 days. The total maximum in the measured period (last 3 years) is 6 days. Downward trends did not exceed more than 2 days in the same period. However, the total maximum for the last 3 years is 7 days. We could use the average long-term ATR (Average True Range) obtained from daily data (3.07%) to estimate Stop Loss orders for our positions. The current value is 2.33%, which is below average. Approximately 90% confidence interval (return between -2.40% and 2.40%) is shown in the histogram below by a red rectangle.

Platinum daily return distribution

Source: WALFIR

We could use the last decile of low to high returns (3.60% ) to estimate Profit Targets, as shown in the chart below.

Platinum daily low to high distribution

Source: WALFIR

TECHNICAL ANALYSIS

The market price has risen by 20% since the beginning of this year and has fallen to around this year’s opening price in March. However, XPT/USD is currently located in an important area of the demand zone (green rectangle), where are the 50.00% Fibonacci retracement level and the psychological level at 1 000. In addition, there is a divergence between the price development and the RSI created since January. In the case of an upward rebound, moving averages, together with the 38.20% Fibonacci retracement level can be the price resistance.

Platinum technical analysis

Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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