In the last few weeks, brands have shown a heavy focus within the space of precious metals. Of course, this tends to happen when an asset reaches a new record high or doubles in value in a very short period of time. Recently, this has been the case in gold markets and silver markets. However, it is critical for investors to remember that many analysts claimed that precious metal assets were essentially the laughing stock of the market only a short time ago.
Source: author via Tradingview
For a longer period, gold markets traded in a side road range that was limited by $ 1,480 at the highs and $ 1,050 at the lows. These trends weighed on the SPDR Gold Trust (NYSEARCA: GLD) and brought a heavy dose of skepticism among investors who consider owners of precious metals as part of a comprehensive portfolio investment strategy.
If we can think back to this period, the side trading activity continued for more than six years, because a majority of the market traders did not see the growing number of factors that support the prospect of much higher valuations in precious metals . In addition to global trade tensions and a general lack of viable alternatives to safe haven, rising public debt levels have made it extremely difficult for global fiat currencies to demonstrate sustainable strength.
If you compare with the traditional store of value that can be found in precious metals, investors should understand that fiat currencies are much more transitional in nature. Recent declines in the greenback have been seen as supportive of stock markets in Asia, and this is just another example showing that ramifications of current market trends will undoubtedly have a long-term impact on the world economy.
Source: author via Tradingview
On March 25, we published an article describing the recent collapse in silver as a “chance of a lifetime” for investors of precious metals. Of course, this can be a serious risk to make these kinds of monumental forecasts and we have certainly been criticized about the possibility that silver marks could make such an extended move.
In the commentary, we discussed some of the reasons why bullish progress continued to stand in silver markets: “In the last month, the iShares Silver Trust has (NYSEARCA: SLV) has fallen by about 21% and many metallurgical traders wonder why the ETF has not received safe haven support from investors. These are honest questions, considering the strong history of silver as a protective possession. But this recent activity has been very unfair (to say the least) and this has created a duality in investor sentiment that is simply not sustainable. “
We close the comment by saying that a “series of unusual macroeconomic events may have created one of the most substantial trading opportunities on record – a real ‘chance of a lifetime’ for those who love SLV.” Of course, we now know that silver was really on the verge of achieving historic price movements and market values in basic silver assets are already trading more than 125% above their low 2020 of March 2020.
Source: author via Tradingview
However, I have also been looking for undervalued trading in the platinum market because this area contains assets that have been missing in all this recent excitement focused on the precious metals. Within this category are the Aberdeen Standard Physical Platinum shares (NYSEARCA: PPLT) works as a high-liquidity instrument that can be used when investors are looking to express a Bullish viewpoint and gain extra exposure for these markets.
The Aberdeen Standard Physical Platinum Shares is a licensed issuer, which means that the fund provides exposure to physical platinum stored in vaults (located in London, UK and Zurich, Switzerland). Found as a major player in the precious metals category, trading activity in PPLT has already begun to experience critical changes that have suggested increasing potential for expanded bull movements.
Source: ETFdb
If we look at the Aberdeen Standard Physical Platinum ETF in terms of its performance until the end of 2019 and the beginning of 2020, it is easy to see why the market may have seen platinum assets with some degree of skepticism.
However, these trends have been sharpening since the end of May 2020 and the total net flows in the Aberdeen Standard Physical Platinum ETF recorded in the last year have reached $ 238.09 million. This is a real increase and it represents a significant deviation from the long average averages of the fund. As a result, the Aberdeen Standard Physical Platinum ETF now appears to be in a strong position to place further rallies towards the end of 2020.
Source: author via Tradingview
For those interested in trading PPLT, we can describe some specific zones for support and resistance that are likely to influence trend activity going forward. At this point, the initial support base of the fund can be found just above the $ 80 handle (close to 81.45). This area marks a zone of short-term consolidation before the last break is higher.
However, price trends in PPLT could see greater sales pressure if this support zone is broken, as technical analysts may start to focus on the previous lows near 54.90 when initiating sales positions. If our support zone wants to stay at mid-level, then our next price target will run at 97.15, but we would probably have to see a period of correction consolidation before this price zone can be reached.
Overall, the precious metals show strength as investors search for a safe and secure store of value that can be trusted over the long term horizons. At this stage, gold and silver markets have received most of the positive attention, but there are still reasons to believe that platinum assets have the potential to grow in this highly uncertain market environment.
Thanks for reading.
Now is the time to hear your voice. Reader interaction is the most important part of the investing learning process! Comments are highly encouraged. We look forward to reading your reading points.
Announcement: I / we have no positions in named shares, and no plans to initiate positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I do not receive compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose supply is mentioned in this article.
