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Natixis Sees 2015 Average Gold Price of $1,140/Oz; Silver At $15.20
By Kitco NewsThursday December 11, 2014 8:42 AM
(Kitco News) - An improving U.S. economy will be the main influence in the price of gold in 2015, as the dollar strengthens and U.S. interest rates may rise, said Natixis on Thursday.
“The correlation between gold and silver will remain strong. Prices of platinum are expected to improve and palladium prices will be strongly influenced by the evolution of the situation between Russia and Ukraine,” the firm said in its 2015 outlook.
Natixis’ 2015 average price for gold is $1,140 an ounce, for silver it is $15.20, for platinum it is $1,354 and for palladium it is $770.
“The strengthening dollar will continue pushing gold prices down. As the dollar strengthens so the need for gold as ‘a safe haven in times of crisis’ dissipates. Moreover, the yen and euro are expected to weaken on the back of expanding central bank balance sheets,” the firm said. “Higher yields will increase the opportunity cost of holding gold. Investors will be incentivized to enter yield-earning investments rather than holding gold which actually incurs a cost. Natixis expects the U.S. Fed (Federal Reserve) to start raising rates in June 2015.”
Silver will continue its strong correlation with gold, they said.
“The downside risk for silver is more substantial, given that the cash cost of production of silver is around $8.80/oz. As with PGMs (platinum group metals), our concern is that should a large outflow from physically backed silver ETPs (exchange-traded products) occur, then prices could drop very quickly. The amount of silver held in physically backed ETPs is equal to around 65% of global production of the metal,” Natixis said.
Platinum prices could rise very slowly in the first half of the year, as cuts in the industry from closing of unprofitable mines are likely, they said. Palladium prices are likely to fluctuate as tensions between Russia and Ukraine remain unresolved.
Auto demand from North America and developing countries should support palladium, but at slower pace than before given moderate growth in developing countries, Natixis said.
“One of our biggest concerns for platinum and palladium prices is the amount held in physically backed ETPs. In a similar manner to gold, we could see substantial outflows which could drive prices down. The amount held in physically backed platinum and palladium ETPs is equal to around 30% of total supply in 2013,” they said.
For base metals they forecast the 2015 average price for copper at $6,335 a metric ton, aluminum at $2,071, nickel at $19,000, zinc at $2,523 and lead at $2,145.
By Debbie Carlson dcarlson@kitco.com
Follow me on Twitter @dcarlsonkitco
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