Platinum inches down ahead of Fed Yellen’s speech
Platinum gained roughly 3 percent on Monday and Tuesday as dull U.S. economic data sparked speculations the Federal Reserve may postpone its rate hike to September.
A report released on Tuesday showed U.S. consumer confidence fell to 95.2 in April from a revised 101.4 in March, lower than analysts’ forecast of 102.6.
The world’s biggest economy eased expansion in the first three months to post 1.1 percent, compared to 2.2 percent growth the previous three months, a report due later on Wednesday may show.
A dovish tone from Yellen is highly expected after the release of a string of downbeat reports, which provided evidence recovery is uneven.
Therefore, the Fed may postpone the decision until September, instead of previous forecasts of seeing an interest rate hike in June.
Platinum, along with other commodities, may take advantage of any dovish comments, as it would weigh negatively on the U.S. dollar.
Precious metals may have some room to rise for some time before the Fed ends the era of near-zero interest rates.
Platinum managed to rebound from the strong downside trend started in January, but the breach of the support line pushed prices lower.
The price is currently hovering near the middle line of the Bollinger Bands, after rebounding from the lower band, where a cross above the 20-day average (the middle line) would make the upper band a price target.
However, platinum may face resistance at the 38.2% Fibo level, while on the other hand it may find strong support from the 23.6% Fibo.