Gold, Silver, Platinum, Palladium prices to rise sharply in 2013: Commerzbank
Monday, 03 December 2012 | 00:00
Gold, silver, platinum and palladium prices are set to rise sharply next year, with yellow metal finally topping $2,000 an ounce, said Commerzbank in a commodity research note.
According to the German bank, other industrially oriented metals should also strengthen in 2013, listing full-year forecasts of $40 for silver, $1,875 for platinum and $855 for palladium.
“The year 2013 is likely to see precious metal prices climbing further or indeed resuming their upswing. The ultra-loose monetary policy pursued by the central banks coupled with geopolitical risks should ensure that gold remains in demand as a store of value and safe haven,” Commerzbank added.
The yellow metal to average $1,950 next year, buoyed by central banks through both loose monetary policy of some and buying of the metal for reserves by others. In the case of gold, one headwind during 2012 is expected to abate next year, they added.
Indian buyers, who were less active this year, to become accustomed to higher prices brought about by factors such as increased duties on gold imports and a weak rupee. Also, the monsoon season is not likely to be as poor as this year, meaning more income and thus gold demand from rural areas. Improved economic prospects in China, another key consumer, should support demand there, the Frankfurt based bank added.
“Investment demand should profit further from the low and negative real interest rates, for the leading central banks will continue to pursue their ultra-loose monetary policy in 2013 in a bid to shore up the economy and stabilize the financial markets,” Commerzbank noted.
Central banks likely will be net buyers for the fourth straight year in 2013, since gold still accounts for a small proportion of currency reserves for emerging economies.
Gold-mine output should rise, but the main noticeable production growth will be in countries where demand will also increase sharply, such as China and Russia, Commerzbank said. As a result, supply from these countries is unlikely to reach the global market.
“All in all, we are confident that the gold price will achieve – and indeed exceed, at least temporarily – the $2,000 per troy ounce mark next year,” Commerzbank continued.
According to the second biggest German bank, silver can be expected to profit as industrial demand picks up. The automotive industry in particular is set to contribute to demand growth. Auto production is expected to expand, and cars use silver for electronic components. An improving economy is also likely to mean more demand from the housing and construction sectors.
“We are convinced that silver will once again exceed the $40 per troy ounce mark in 2013,” they added.
Platinum Group Metals
The bank said a widely followed Johnson Matthey report issued earlier this month does not look for any fundamental change to the supply/demand picture next year. Johnson Matthey forecast a supply deficit this year and next.
“The strikes in South Africa are likely to have a long-lasting impact, and may even flare up again if low prices and higher costs result in mine closures and mass redundancies. At the same time, demand from the automotive industry and other industrial applications is expected to recover. This points to a further year of deficits, which should be reflected in higher prices. We expect platinum to exceed the $1,900 per troy ounce mark by year’s end 2013,” Commerzbank added.
Palladium is also forecast by Johnson Matthey to be in a supply deficit in both 2012 and 2013.
“Supply is likely to fall further, mainly as a result of lower Russian sales. At the same time, demand from the automotive industry is likely to remain robust, so another year of supply deficit appears inevitable. We see considerable upside potential for palladium and foresee a price of $950 per troy ounce by year’s end 2013,” Commerzbank concluded.
Source: Commodity Online