May 19, 2025
(IT MIGHT BE TIME TO START ACCUMULATING SOME PLATINUM)
May 19, 2025
Hello everyone
WEEK AHEAD CALENDAR
MONDAY, MAY 19
No items of significance
TUESDAY, MAY 20
12:30 a.m. Australia Rate Decision
Previous: 4.1%
Forecast: 3.85%
Earnings: Home Depot, Keysight Technologies, Palo Alto Networks
WEDNESDAY, MAY 21
2:00 a.m. UK Inflation Rate
Previous: 2.6%
Forecast: 3.3%
7:00 a.m. Mortgage applications (week ended May 16)
10:30 a.m. EIA crude inventories (week ended May 16)
Earnings: Lowe’s, Target, TJX
THURSDAY, MAY 22
8:30 a.m. Initial jobless claims (weeks ended May 17)
8:30 a.m. Chicago Fed National Activity index (April)
9:45 a.m. S&P Global Composite PMI (May preliminary)
Japan Inflation Rate
Previous: 3.6%
Forecast: 3.7%
Earnings: Ralph Lauren, Analog Devices, Ross Stores, Deckers, Intuit, Workday, Autodesk, Copart
FRIDAY, MAY 23
2:00 a.m. UK Retail Sales
Previous: 0.4%
Forecast: 0.4%
8:30 a.m. Building permits (April)
10:00 a.m. New home sales (April)
There has been no traction on peace talks to resolve any conflicts around the world.
Israel is still bombarding Gaza to rid the area of Hamas, despite the toll on innocent human life. But food aid is now reaching the area, as the threat of starvation is now obvious.
And Putin refuses to come to the table to discuss any talks of peace, so no break in Russia’s bombardment of Ukraine. Putin doesn’t want peace; he wants territory.
Geo-political conflicts and flashpoints around the world have seen investors piling into gold as a safe haven over the last couple of years.
However, one metal has been sitting in the quiet corner – unnoticed.
And that metal is platinum.
Platinum is still trading near levels last seen during the bottom of the 2008 Great Financial Crisis, but a combination of tight supply, growing demand from clean energy industries, and historical price relationships suggests this metal could soon take off.
In every bull market for precious metals, capital appears to move in a predictable order. Initially, it flows into gold as a safe haven. Once gold has made its move, silver, known for its higher volatility, usually follows. Finally, investors look for opportunities in lesser-known metals like platinum and palladium, and so on.
Right now, we are at that juncture. Gold has already broken out to new highs. Silver is gaining momentum. And platinum, still lagging, may be next.
Look at the chart here.
The gold-to-platinum ratio measures how many ounces of platinum are needed to purchase one ounce of gold. This ratio helps investors assess the relative value of these two precious metals.
A higher ratio indicates that platinum is undervalued compared to gold.
A lower ratio suggests that platinum is overvalued relative to gold.
Historically, when the ratio exceeds 0.95, platinum is considered undervalued; when it drops below 0.65, platinum may be overvalued.
As of May 14, 2025:
Gold is trading at ~ $ 3226.11 USD per ounce.
Platinum is trading at ~ $ 988.65 USD per ounce.
This results in a gold-to-platinum ratio of about 3.26, indicating that platinum is significantly undervalued compared to gold. Such a high ratio suggests a potential opportunity for investors, as platinum may offer more value relative to gold at this time.
Supply/demand narrative
The platinum supply is under pressure. South Africa is the country that provides most of this metal, and mines there are facing major problems like power shortages and shutdowns. Furthermore, not many new mining projects are starting up.
However, demand is increasing. Clean energy technologies appear to be front of the queue in demand for this metal. Platinum is used in hydrogen fuel cells, which are becoming more important in the move to greener energy systems.
What does the chart look like…
Platinum appears to be forming a base around $ 1000 USD. If it can close above $ 1200 USD on a monthly chart, that might just confirm the beginning of a major long-term uptrend. Analysts are suggesting price targets of $3000 over the next few years.
How do I participate…
You could buy platinum bars or coins from trusted dealers. Remember, you would need to store these, and then there would be insurance to think about.
Or you could scale into an ETF which is backed by the physical metal. (ASX: ETPMPT).
If you play the futures market, use contracts for difference (CFD’s), you could start scaling in here and accumulating.
MARKET UPDATE
S&P 500
Late last Friday, Moody’s downgraded the U.S. credit rating. Moody’s now projects US federal debt to surge to around 134% of GDP by 2035, up from 98% in 2023. Since that announcement, the U.S. dollar has fallen, as has the S&P 500.
But…
…as hard as it is to believe, there is still potential for more gains in the index, above the Feb peak at 6147. We know the market is getting quite overbought, so any gains above the Feb peak (if we reach that level – there are no guarantees) would likely be limited/be seen as part of a longer-term topping movement.
Resistance = 5955/65, 6150
Support = 5840/50, 5780/90
GOLD
Earlier today, gold tested 3250 (futures) but has since declined. As a big picture top is still forming, we can expect more ranging movement in the metal. The market has already tested significant support at 3100/10 area. A break of this support could confirm the peak is in, and we could see an acceleration to the downside. On the other hand, if gold remains above this level, we should see more ranging. We could see a final peak in the range around 3371-3400. This ranging behaviour allows momentum to slow before a final roll over to the downside.
Resistance: $3245/55, $3307, $2425/50 area
Support: 3100 area, 3130k
BITCOIN
Earlier today, bitcoin shot up to near $107k and then just as quickly declined to near $102K. A very volatile market – risk of a peak for a few weeks, as the market is getting overbought.
Resistance = 105.6/106.1k
Support = 100.7/97.6/98.1k
HISTORY CORNER
ON MAY 19
QI CORNER
Charles-Henry Monchau, CFA, CIO & Member of the Executive Committee at Syz Group
Aksinya Staar, Polymath Mindset Strategist/Futurist/Author/Board Advisor
SOMETHING TO THINK ABOUT
Cheers
Jacquie