Platinum market shows its mettle as economic indicator

Markets have retreated recently. The DOW is testing the 10,000 area and the Shanghai Index is testing the 3,000 area. Markets are a measure of economic strength but they also reflect the behavior of investors who are prone to overreactions. Commodity markets can provide another perspective on economic strength and development.

Copper is used as a measure of the developing strength of an economy. It is a foundation industrial metal for many basic economic processes. The behavior of the sustained rise in the price of copper suggests a sustained rise in economic demand fuelled by a global recovery. The weekly chart shows the underlying trend.

The modern economy is more sophisticated than the foundation copper economy. A useful way to track the growth of the modern economy is by following the price and trend activity of precious metals such as platinum. This gives a platinum standard of economic measurement.