Gold Prices: LBMA Analysts See Dramatic Divergence In Precious Metals Forecasts

January 31, 2018

New York (Jan 31)  It could be a dramatic year for the precious metals market as there is a significant divergence in price forecasts for 2018, according to the London Bullion Market Association.

Tuesday, the LBMA released its forecast of 34 precious metals analysts, noting that there is a $390 trading range between the lowest end of the estimates and the highest prediction.

The average gold prices among LBMA contributors is $1,318 an ounce, with the most bullish forecast coming from Rhona O’Connell at Thomson Reuters GFMS who sees gold prices peaking at $1,510 an ounce in 2018. At the same time Bernard Dahdah, precious metals analyst, is the most bearish seeing gold prices pushing to a low of $1,120 an ounce.

“Opinions differ as to the level of US real interest rates, the likely impact of geopolitical factors and the pace of global economic growth. Our contributors are divided as to what will have the greater impact,” the LBMA said.

It’s not just the gold market; all the precious metals are seen trading in a wide range with $9 range in silver, a $518 range in platinum and a $750 range in palladium.

LBMA contributors see silver prices averaging the year around $17.81 an ounce. The highest forecast came from Matthew Turner at Macquarie Capital who sees a high at $23 an ounce. Dahdah is also the most bearish on silver seeing a price hitting a low at $14 an ounce within the year.

Platinum prices are expected to average the year around $1,000 an ounce. Eddie Nagao, from Sumitomo Corporation, was the most bullish seeing a peak price at $1.250 an ounce. Independent analyst Stevens Glyn with the most bearish outlook seeing prices falling to $732 an ounce.

Finally, analysts see palladium averaging 2018 at $1,080 an ounce. Ross Norman, from Sharps Pixley, was the most bullish as he expects prices to peak at $1,500 an ounce; Dahdah was once again the biggest bear as he sees prices falling to $750 an ounce this year.

Silver To Outshine the Precious Metals In 2018

According to the forecasts, the analysts predict that silver has the most to gain in 2018. The LBMA said the silver prices in the first half of the month came in at $17.13 an ounce, and a push towards the average price would represent a gain of 4%.

“We expect the world economy to have another good year, sufficient for silver to re-rate against gold in line with its historical relationship to the strong performance from other industrial metals. Investors won’t come flooding back, but neither will they disappear in such numbers again,” said Turner in his forecast.

So far this year, most analysts have described the silver market as lackluster as the gold/silver ratio remains near multi-year highs. shows the gold-silver ratio currently trading at 78 points.


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