(Bloomberg) -- Platinum may decline toward $800 an ounce, reversing this year’s 23 percent gain, as the metal slumps into a “bear trend,” Standard Chartered Bank forecast, citing trading patterns.“Spot platinum is resuming the bear trend, with trendline support giving way and a slide below $1,002 and $999 to build,” David Barclay, the bank’s commodity strategist, wrote in a report yesterday. “A break down towards $800 should follow.”So-called trendlines, used to determine momentum, are found by connecting an asset’s high prices over a period, and its lower prices to form a channel. Technical analysis is founded on the assumption that an asset’s past trading patterns may be used to predict future moves.Platinum for immediate delivery rose as much as 0.8 percent to $1,148.50 an ounce, and was at $1,147 at 8:40 a.m. Singapore time. The metal hasn’t traded at $800 an ounce since Dec. 12, and last fell below $1,000 an ounce on Feb. 10.
Most of the metal’s so-called daily momentum indicators such as the 14-day relative strength index and the stochastic oscillator are bearish, London-based Barclay wrote. The 50-week momentum oscillator is also starting to turn lower after nearly reaching zero, and should add “bear pressure,” he wrote.The 250-day moving average of $1,266.99 is “looming above” the 20-day and 60-day moving averages, which highlights the potential for declines, the report said. “The break down in the spot metal price is consistent with the long term trend -- down,” wrote Barclay.
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