Precious Metals Price Outlook Economic Forecast

Precious Metals Price Outlook

Fed tightening cycle and low industrial demand lead August’s decline in precious metal prices

Prices for precious metals declined in August for the sixth time in the last seven months, falling 2.9% on a month-on-month basis (July: -3.6% month-on-month).

The narrative of previous months is unchanged. Strong economic growth in the United States and higher inflation expectations are prompting the U.S. Federal Reserve to continue with its tightening cycle. Higher interest rates in the United States reduce demand for safe-haven assets such as gold in favor of U.S. dollar-backed assets. Moreover, usage of some precious metals for industrial purposes has been threatened by an uncertain global economic outlook, especially for China.

Softer global economic conditions will reduce industrial usage of precious metals, while higher interest rates in the United States will trim demand for safe-haven assets. Our panel of analysts expect precious metal prices to decline 0.3% year-on-year in Q4 2018 (previous edition: +1.3% yoy). FocusEconomics panelists, however, expect that the trend will reverse next year and that precious metal prices will expand 3.6% in Q4 2019.

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Precious Metals Historical Price Data

2012  2013  2014  2015  2016  
Gold1668.69  1410.71  1265.83  1159.8  1248.54  
Silver31.14  23.82  19.07  15.71  17.15  
Palladium643.47  725  803.44  690.55  614.03  
Platinum1549.48  1485.41  1383.61  1051.85  987.37  

Note:
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). 

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