Editor’s note: With so much market volatility, stay up to date with the daily news! Get caught up soon with our quick summary of today’s must-read news and expert opinions. Sign in here!
(Kitco News) – The push for precious metals is expected to continue until 2021 with double-digit gains across the board, according to analysts participating in the London Bull Market Association’s (LBMA) annual price forecast report.
The LMBA said in its annual report on Thursday that 38 market analysts participated in this year’s forecast survey. Gold prices are expected to average $ 1,973.80 per ounce, up 11% from the 2020 average. However, the outlook is only a moderate increase of 4.5% compared to the average price in the first half of January. .
“Gold is expected to be subject to a high level of volatility in 2021, with the largest forecasts predicting a high / low range of $ 1,192, compared to $ 780 in 2020,” the LBMA said in the report.
With the expectation that the gold market will be relatively tame until 2021, the LBMA said it expects all eyes to be on silver. Analysts of precious metals expect the price of silver to average $ 28.50 per ounce this year, a 38% increase over the average price in 2020 and 8% higher than the average price since the first half of January.
The volatility seen in the silver market over the past week may predict the price action through the rest of the year.
“Silver is undoubtedly the star of the program,” the LBMA said. “Silver is expected to perform best in 2021, but with a trade limit of $ 38.5, almost five times its series forecast last year, it looks like it’s a real rollercoaster ride in 2021.”
If we look at the Platinum Group Metals (PGM) market, analysts expect the prosperity between platinum and palladium to reverse. According to analysts, platinum averages 2021 $ 1131.50 per ounce, which is 28.2% higher than the average price in 2020.
Meanwhile, analysts expect palladium prices to average $ 2,439.10 per ounce this year, more than 11% higher than the average price last year.
“The market fell in love with palladium last year, and it proved to be the star, delivering an impressive 52% price increase by 2020. But analysts predict it will be the worst performing metal this year,” he said. said the LMBA.
On the key factors that will push up the price of precious metals in 2021, the report noted that 25% of analysts said that low to negative interest rates would be positive headwinds for gold, silver and PGMs.
At the same time, 21% of analysts said a weaker US dollar would support higher precious metal prices, and 16% watched the Federal Reserve’s highly accommodative monetary policy.
Look at the most bullish and bearish forecasts. Thorsten Polleit, chief economist at Degussa, is the best at gold because he expects prices to rise to $ 2,300 per ounce.
“It can be expected that the gold bull market will not only continue in 2021, but also beyond.” A large number of factors are pushing up the price of gold further. ‘To ward off the effects of the politically prescribed lock-in crisis, the central banks will keep the world’s interest rates artificially low and expand the money supply at unprecedented growth rates,’ ‘he said, supporting his positive outlook.
René Hochreiter, analyst at Noah Capital Markets / Sieberana Research, is the most popular in the gold market because he expects the improvement in economic conditions to outweigh the precious metal. He said he would drop gold prices to $ 1,590 per ounce this year.
“After the fastest recovery in the history of global stock markets, gold may have an equally sharp decline as risk and volatility decline,” he said.
Polleit is also the strongest analyst for silver prices. He said he will increase silver to $ 55 per ounce this year.
“The price of silver has benefited over the past two years as investors have increasingly built up their silver exposure via ETPs. This trend is likely to continue – especially as silver ETPs in the ultra-low interest rate environment offer institutional investors opportunities for return and diversification,” he said. .
Frank Schallenberger, an analyst at LBBW, is the most silvery. He sees prices falling to $ 16.51 per ounce this year. He noted that he does not expect investment demand to be as strong as in 2020.
“The reason for the good performance of silver in 2020 was the extreme purchase of ETCs. It will not be repeated this year. And the fundamentals of silver do not look too good. The industrial demand as well as the demand for jewelry will for a while take come back, ‘he said.
If we look at platinum, Glyn Stevens of MTSS UK is the best on the industrial precious metal. He said he sees prices rising to $ 1,827 per ounce this year.
“2021 could very well be the year in which platinum will be the center of the world of precious metals. Demand will not only exceed supply, but the green hydrogen revolution is coming and the role of platinum in this revolution is crucial,” he said. he said.
On the other side of the trade, Schallenberger is the biggest bear in the platinum market as he sees prices drop to $ 774 per ounce.
‘Fundamentals do not yet look too good for platinum! The supply surplus in the market is here to stay and the triumphant advancement of electric vehicles will make the demand for platinum catalysts even smaller, ‘he said.
Although palladium is expected to be the worst asset in the precious metals space, there are several strong forecasts for this year. Six analysts see palladium prices rise to $ 3,000 an ounce.
Zhexing Wang of the Bank of China, is the largest palladium bear, as he sees prices drop to $ 1,500 per ounce.
“Palladium is still facing great uncertainty in 2021. Palladium is more expensive than platinum, but it will probably be replaced with platinum in industrial use, and the price difference between palladium and platinum may continue to decline,” he said.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views expressed Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, not Kitco Metals Inc. or the author cannot guarantee such accuracy. This article is for informational purposes only. It is not a request to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept the blame for losses and / or damages arising from the use of this publication.