Precious Metals Price Outlook
Monetary policy will set the tone
The shock of the Brexit vote has waned and the focus is now returning to the next U.S. rate hike. As a result, investors’ appetite for safe haven assets remained subdued in September and at the beginning of October, which weighed on precious metals prices. OPEC’s recent production-freeze agreement also failed to generate an upside price response in precious metals, particularly in gold prices, despite the potentially inflationary implications of such a deal.
Monetary easing policies in major central banks around the world—with the exception of the Federal Reserve—continue unabated. The European Central Bank will continue its monetary easing bias until inflation reaches its target. In Japan, subdued wage growth and declining inflation expectations should keep the Bank of Japan in easing mode too. Heading into the fourth quarter, most analysts expect precious metals prices to be supported by loose monetary policy from major central banks, as well as by market uncertainties related to the U.S. presidential elections and to the health of large European banks. However, downward pressure on the outlook comes from rising prospects that the Federal Reserve will increase interest rates at its December monetary policy meeting.
This year, investor demand will remain strong. So far this year, gold held in ETFs has increased by more than 300 metric tons. At this pace, it is likely that 2016 will record the largest ETFs inflows in a year, surpassing 2009 levels. Meanwhile, weak physical demand has remained as a headwind.
Against this backdrop, the outlook for precious metals remains positive and analysts project that prices will increase 20.8% annually in Q4 2016. This month’s projection was revised slightly down from the 21.5% increase that analysts had expected last month as data showing recently long liquidations reflect prospects of a Fed rate hike in December.
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Precious Metals Historical Price Data
Gold prices in USD per troy ounce (toz).
Silver prices in USD per troy ounce (toz).
Palladium prices in USD per troy ounce (toz).
Platinum prices in USD per troy ounce (toz).
All prices are average of period (aop).
Price forecasts and historical data for Energy, Metals and Agricultural Commodities