Platinum Begins Big Breakout Rally

If you were not paying attention, Platinum began to rally much higher over the past 3+ days – initiating a new breakout rally and pushing well above the $1250 level. What you may not have noticed with this breakout move is that commodities are hot – and inflation is starting to heat up. What does that mean for investors/traders?

DAILY PLATINUM CHART SHOWS CLEAR BREAKOUT TREND

First, Platinum is used in various forms for industrial and manufacturing, as well as jewelry and numismatic functions (minting/collecting). This move in Platinum is more likely related to the increasing inflationary pressures we’ve seen in the Commodity sector coupled with the increasing demand from the surging global economy (nearing a post-COVID-19 recovery). The most important aspect of this move is the upward pricing pressure that will translate into Gold, Silver, and Palladium.

We’ve long suggested that Platinum would likely lead a rally in precious metals and that a breakout move in platinum could prompt a broader uptrend in other precious metals. Now, the combination of this type of rally in Platinum combined with the Commodity rally and the inflationary pressures suggests the global markets could be in for a wild ride over the next 12 to 24+ months.

This Daily Platinum chart highlights the recent upside breakout rally that has prompted a rally from $1050 to $1250+.If this rally continues to target the 100% Fibonacci price extension, near $1300, then it will become very clear that Platinum is rallying away from other precious metals. If this coincides with a continued general Commodity price rally, then we may start to see an inflationary cycle setting up that really change things – very quickly.

This type of “triple-whammy” is very similar to the commodity/inflationary price rally that took place in the late 1970s and early 1980s. For those of you that don’t remember this trend, commodities started to rally in the early/min-1970s, prompting Gold to rally a low price near $100 (in 1976) to a higher level near $195 (in 1978) – but that was just the beginning. After that rally stalled a bit, a bigger commodity price rally took place in 1979 that prompted a much bigger Gold price rally and started an inflationary price cycle that prompted the US Fed to take aggressive action in curtailing inflation. Gold rallied from $169 in late 1978 to over $870 in early 1980 – a 420% increase.

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