Sept. 4 (Bloomberg) -- Platinum may jump 11 percent to the highest since February after prices climbed above the 200-day moving average, according to TD Securities.
The attached chart shows futures in New York settled at $1,538.20 an ounce yesterday, above the 200-day moving average near $1,534. Prices have closed higher than the measure in two of the previous four sessions, a bullish signal that means the metal may reach $1,700 by the end of the year, according to Bart Melek, the head of commodity strategy at TD Securities.
Platinum has also rebounded from $1,296 reached on June 28, the lowest since October 2009. That puts the metal above the 50 percent retracement level identified by Fibonacci ratios, another bullish sign, Toronto-based Melek said by telephone.
“Platinum looks to be on an uptrend,” said Melek, who was among the five most-accurate precious-metals forecasters over the past two years. “We see positive actions on the charts.”
Platinum, which slumped 15 percent last quarter, gained 6.8 percent last month on signs of economic revival in Europe and China. Chinese jewelers are the world’s biggest platinum consumers followed by European car companies, according to Johnson Matthey. Mine output in South Africa, the world’s biggest producer will decline 1.6 percent this year to the lowest since 2000, according to Barclays Plc and Johnson Matthey data.
“Bullish fundamental reasons in tandem with strong technical charts will help prices rise,” Melek said.
In technical analysis, investors and analysts use charts of trading patterns and prices to predict changes. Fibonacci studies are based on the theory that prices rise or fall by certain percentages after reaching a high or low.
--Editors: Millie Munshi, Thomas Galatola