About a month ago, I wrote a post called The Gold Platinum Spread: A Leading Indicator on Inflation.
Prop traders can trade spreads like anything else, including outright directional trades or options. Spreads are living and breathing organisms so to speak, and they develop trend lines, resistance, and support.
Here is what the April Gold / Platinum Spread looks like today:
Gold / Platinum Spread: A leading indicator on Inflation
By the chart, the spread rallied above the breakout level of about $325 premium to the platinum side and stalled at its high of about $500. The $400 level looks like support, so if you’re trading this spread, you might see weakness below $400.
The seasonal chart provided by Moore Research suggests that the seasonal tendency will be for the spread to continue to widen though. I would suggest that aspiring spread trend followers follow the price above all else.
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