It looks like the technical downward break is finally here in the gold market with some technical follow through in platinum. After making a new high for the move platinum closed right back below it’s $1540 resistance at $1536.70. It basically means the rally is over.

Is platinum going to follow gold or the S&P? Jewelry fabricators (the gold crowd) usually can afford to stockpile while automotive catalyst demand (the S&P followers) use just-in-time pay as you go inventory systems. So there is a bit of a push-me-pull-you effect there.

Peter Duncan of Johnson Matthey says stockpiles are full while demand should continue to be strong.

"The biggest market by far for platinum jewellery is China - although demand has fallen off a bit this year - that's hardly surprising because we saw a large period of stock building in the first half of 2009 which is unlikely to be repeated. But the underlying demand in China is still very strong, and almost irrespective of price, we see that that has a long way to go before it approaches any ceiling," he says.

Johnson Matthey has a vested interest in creating the perception of a strong platinum market, meaning higher prices. So a pinch of salt is required. On the other hand they are in the business so they should know.

If gold continues to fall platinum should follow.

Oct platinum $1,536.70, down $19.10; Range $1,534.00-$1,565.90

Sep palladium $466.55, down $8.45; Range $465.90-$481.50

Aug gold $1,158.00, down $25.10; Range $1,156.90-$1,186.50

Sep silver $17.626, down 57.4 cents; Range $17.580-$18.235