(Kitco News) - Gold's consolidation above $3,300 an ounce is pushing investors to look for value in other sectors of the precious metals market, providing new opportunities for silver and platinum. However, one bank expects gold’s rally to resume before the end of the year.
In its third-quarter outlook, commodity analysts at BMO Capital Markets said they expect the gold market to remain in a holding pattern through the summer as investors acclimate to current price levels, but forecast prices will rally to $3,600 an ounce in the fourth quarter.
“We are inclined to believe its multi-year rally isn’t over as global debt climbs and the de-dollarisation theme continues to play out,” the analysts said.
BMO’s bullish outlook comes as gold trades at $3,330.56 an ounce, up 0.23% on the day.
BMO analysts said it is difficult to be bearish on gold, as central bank demand is expected to remain healthy through 2025.
While gold is anticipated to take a much-needed pause—holding near 30% gains so far this year—BMO is particularly bullish on platinum. The analysts see platinum rallying to $1,500 an ounce by year-end, a further 10% gain from current levels.
Spot platinum last traded at $1,347 an ounce, up 2% on the day.
“After several years of deficits, the platinum market appears to finally be drawing on investor stockpiles to remain balanced, causing prices to break out,” the analysts said. “Looking forward, we see further upside for platinum in the second half of this year, given that the persistent deficit will require prices to rise to levels that incentivize investors to sell more stock.”
BMO analysts are also bullish on silver, though they see limited upside in the near term.
“Silver has had a healthy uplift in recent weeks, peaking at a 13-year high of $37.30/oz in mid-June, likely driven by a rotation out of gold into other hard assets. However, this breakout above $35/oz has also coincided with a reduction in COT net positioning, which we believe is likely to limit further upside,” they said.
Spot silver last traded at $36.18 an ounce, up nearly 1% on the day.
Although silver demand remains healthy, BMO analysts cautioned that a potential slowdown in renewable energy demand—specifically for photovoltaic solar panels—could weigh on prices through year-end.
“In April, the U.S. announced plans to impose anti-dumping tariffs of up to 3,521% on solar imports from Cambodia, Thailand, Malaysia, and Vietnam, which have represented the vast majority of U.S. solar supply in recent years. Meanwhile, China has moved from guaranteed fixed pricing to market-based pricing for all solar projects installed from June 1 onward—a shift that has reportedly already caused at least 13 large solar projects to be cancelled,” the analysts noted.
However, they added that broad-based industrial demand for silver should continue to support prices at elevated levels.
“Assuming a worst-case scenario in which solar installations in China and the U.S. fall by 25% and 75% year-over-year, respectively, this would remove approximately 110GW of solar installations in 2025. Assuming a silver intensity of ~10mg/W, that would equate to a demand loss of around 35Moz. Given our forecast of a persistent silver deficit of ~150–200Moz for the foreseeable future, we do not expect the negative headlines to impact silver fundamentals this year, keeping prices buoyant,” the analysts concluded.
