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LBMA Survey: Gold, Silver Seen Flat In 2014; PGMs Expected To Rise

By Kitco News
Tuesday January 21, 2014 8:22 AM

(Kitco News) -Analysts taking part in the annual London Bullion Market Association survey look for gold and silver prices to be “broadly flat” in 2014 but look for “modest” increases in platinum group metals, the organization said Tuesday.

Collectively, participants in the survey look for gold to average $1,219 an ounce in 2014, which would be 0.9% lower than the first week of the year, the LBMA said. Gold closed 2013 at $1,201.50 an ounce, which was 28% lower than the first week of 2013 and ended 12 consecutive years of price growth. The average forecast range for 2014 was listed at $1,067 to $1,379.

“Analysts cite the possible strengthening in the U.S. dollar, the extension of U.S. tapering of QE (quantitative easing) into 2014, weak global inflationary pressures, oversupply of gold and further possible ETF (exchange-traded-fund) liquidation as factors which could restrain gold prices,” the LBMA said. “But the price could be supported by continued strong demand from China, a relaxation in India’s import duties as well as the prospect that low prices could constrain mine output and supply of scrap.”

Analysts collectively look for silver to stabilize in 2014 after a 36% decline last year, the LBMA said. The average 2014 forecast was $19.95 an ounce. The average forecast range was $16.37 to $23.94.

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“Prices could come under strain because of the large surplus supply in the silver market and industrial demand for silver could be hit if global GDP (gross domestic product) growth is weak,” the LBMA said. “The added risk is that if prices weaken this might encourage silver ETF holders to liquidate their positions, which would depress prices further. But forecasters also think that prices could benefit from strong global industrial growth, particularly from the photovoltaic sector, which may also attract investor interest to offset some of the possible downside factors.”

Meanwhile, analysts look for platinum prices to average $1,490 in 2014, which is 6% higher than its price at the start of the year, and to trade in the range $1,300 to $1,650.

“The prospect of disruption to supplies from strikes and industrial unrest, combined with potential growth in photovoltaics and autocatalyst demand, are cited as factors which could support prices,” the LBMA said.

Forecasters called for palladium prices to average $774.81 in 2014, up 5.8% from where it started the year and around $50 above its average price in 2013, said the LBMA. “Forecast contributors also expect the palladium price to benefit from shortage of supply, particularly given limited mine supply and waning exports from Russian state stocks,” the LBMA added.

The LBMA said forecasters correctly predicted the price direction for “many years,” before they were caught off guard by a collapse in prices in 2013.

The full press release from the LBMA, with a listing of forecasts of all of the analysts who took part, is available at this link.

By Allen Sykora of Kitco News; asykora@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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