The reasons for USD strength have been well documented this year as the Fed took a hawkish policy stance to control surging US inflation, and safe haven bids also boosted the USD. However, recently there has been a big rise in USD short positions via the CFTC report as asset managers eye a peak in the USD. If inflation data comes in weaker on Thursday then the USD may find further reasons to weaken.
One commodity that may see some early gains from USD weakness is platinum. Platinum has some very pronounced gains as many industrial purchases of platinum are made around the start of the year which has given platinum its exceptionally strong seasonal pattern.
Over the last 25 years, platinum only lost value twice between December 20 and February 20. So, if there are reasons for USD weakness can that give an early entry into platinum’s seasonal pattern?
Major Trade Risks: The major risk here is that US inflation keeps gaining higher which will likely keep the USD bought and that should pressure platinum lower. Also slowing global demand could impact industrial demand for platinum this year.
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