Platinum futures have been quietly gaining ground on the rest of the precious metals complex in recent weeks, putting a noticeable dent in the record discount in its price relative to gold. As both markets have moved north, platinum has shrunk the gap to well under $100 per ounce but still remains historically undervalued relative to the yellow metal. Autochartist has been tracking the progress in both markets, and shows platinum to be at point where a possible pullback may narrow the gap even further. Platinum's rise has been defined by a steady march higher within the boundaries of a Channel Up chart pattern, moving in sympathy with gold but gaining more in terms of dollars per ounce over the long term. This advance has carried the platinum price to the long term resistance level established by the channel, which may imply a pullback for both metals. A decline from here may see a shallower retracement for platinum, however, as support provided by the bottom of the channel comes in near $1,630 per ounce. This would amount to a $30 per ounce pullback, which may further narrow the gap in the event of pronounced weakness in gold.
An alternative outcome to watch for is a technical breakout from this channel caused by the resurgence in platinum buying. This would occur on a move above trend line resistance at $1,680 per ounce. Such a move may mark an acceleration of the uptrend, where the momentum in platinum may set the stage for a return to its normal position- trading well above the price of gold.
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