Bank of America cuts gold, silver, PGM, copper forecasts for 2021
(Kitco News) - Although the inflation threat continues to support gold prices, the precious metal is walking a narrow path with the potential for tighter monetary policy keeping the market in line, according to analysts at Bank of America.
In a report published Thursday, the bank slashed most of its forecasts for precious metals and base metals.
Looking at gold prices, the analysts said that they now see the precious metal averaging the year $1,828, down 0.8% from their previous forecast. The bank sees gold prices pushing back above $1,900 an ounce by the fourth quarter.
At the same time, the bank also lowered its silver forecast. The analysts see silver prices averaging this year around $27.71 an ounce, down 3.9% from the previous forecast. The analysts added that they like silver over gold going forward.
"Gold continues to tread a fine line between rates and inflation, while silver should benefit from accelerating growth. Silver is preferred due to rising demand in solar panels and growth in electrical applications," the analysts said.
Looking at Platinum Group Metals, Bank of America said that they see platinum prices averaging the year around $1,287 an ounce, down 2.2% from the previous forecast. Palladium is expected to average the year around 2,788 an ounce, down 1.9% from the previous estimate. However, long-term, the bank sees both platinum and palladium prices rising 8% as high production costs limit supply.
Looking at precious metal equities, the bank said that its top senior producer pick is Newmont. Its top royalty play is Franco Nevada. For silver equities, the analysts' top pick is Wheaton Precious Metals; meanwhile, the bank's top intermediate precious metals pick is Pan American Silver. The bank's top intermediate gold producer is SSR Mining.
Turning to base metals, the bank has also lowered its outlook for copper, lead, and nickel.
The bank sees copper prices averaging 2021 around $9,868 per ton, down 6.7% from the prior forecast.
For nickel, the bank sees prices averaging the year around $17,436 per ton, down 0.1% from the previous forecast.
Finally, the bank lowered its lead outlook, seeing prices average $2,070 per ton this year, down 0.1% from the previous estimate.