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LBMA forecasters split on price of gold in 2018

Topics [ silver bullion prices gold bullion prices ]

The London Bullion Market Exchange’s latest Precious Metals Forecast Survey has split analysts on the likely direction of precious metals in 2018.

The annual forecast brings together a group of experts to predict the high, low and average price of gold, silver, platinum and palladium during each 12-month period.

This year 34 participants were asked for their views. Notable factors that divided the group’s projections included the level of U.S. real interest rates, the likely impact of geopolitical factors and the pace of global economic growth.

For gold, the different opinions prompted forecasts in a trading range of US$390 – from a low of US$1,120 per ounce to a high of US$1,510 per ounce.

With similar divergences in the other estimates, including a silver low of US$14 rising to a high of US$23, the LBMA said we could be in for “a dramatic year in precious metals”.

The extremes at either end of the forecast, however, effectively cancelled each other out with average price predictions for each metal in 2018 little different from those actually seen in the first half of January.

If the combined wisdom plays out, the average price of gold across 2018 would be US$1,318, with silver averaging at US$17.81.

In the 2017 forecast survey analysts predicted that the average gold price for the year would be US$1,244. As it transpired, they were just 1% out with actual average price of US$1,257.

Read the full survey and what the individual analysts had to say about precious metals prices in 2018.


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‘Brexit’ fuels demand for gold

Topics [ gold market invest in gold gold bullion prices ]

NEWS

 

‘Brexit’ is shorthand for the possibility of a British exit from the European Union following a UK referendum on 23 June 2016.

Extremely close, the most recent opinion polls show the possibility of the Brexit camp coming from behind to snatch what was until recently thought to be an unlikely victory.

With worries that the 28-member EU could consequently begin to unravel, equity markets are gripped by uncertainty. In the past four days, the UK’s FTSE100 stock index has recorded losses of £100 billion.

Fuelled by fears for the British economy, some investors are turning to gold in an effort to protect their wealth. One major gold dealer in the UK has reported it is already experiencing increased sales, and is forecasting a huge rush for gold if the leave campaign is successful.

Turmoil in Europe, like the earlier possibility of Greece’s exit (Grexit), is likely to be contagious. Being an economic powerhouse, the impact of a British exit will have far greater ramifications than Greece’s prior exit threat. Among global equity markets turning sharply lower on Tuesday, the ASX lost over 2% as nervous investors dumped shares for less risky bonds and gold.

With the rhetoric heating up between the pro and anti-European campaigners in Britain this week, experts are broadly in agreement that the price of gold will climb further. Should voters confirm a Brexit in eight days time, the possibility of further slides in equities and declining world trade would only further strengthen its safe haven appeal.

If, on the other hand, those who wish to stay in the EU, led by Prime Minister David Cameron, are successful, plenty of risk factors with potential to damage world financial markets remain.

Along with other risk factors including worries about the underlying strength of China’s economy and the possibility of a Trump presidency, the allure of gold only gets brighter.

Brexit



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Returns Matrix Demonstrates Gold Is For The Long Term

Topics [ gold bull market gold bear market gold bullion prices ]

RESEARCH AND ANALYSIS

Discover the return on a gold investment over a range of timeframes in this Returns Matrix for Gold created by Bron Suchecki. Click to learn how.



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2015 LBMA Forecast Survey Published

Topics [ gold bullion prices ]

RESEARCH AND ANALYSIS

Click here for the full pdf version of the 2015 LBMA Forecast Survey, which includes supporting commentaries from a record 35 analysts on expected price outcomes for gold, silver, platinum and palladium.



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How Accurate Is The LBMA Precious Metals Forecast Survey?

Topics [ silver bullion prices gold bullion prices ]

RESEARCH AND ANALYSIS

At the beginning of each year the London Bullion Market Association (LBMA) polls a range of respected precious metals analysts in the large banks and independent consultancies for their forecasts for metal prices for the coming year.

The recent LBMA price forecast has just been released, with contributors “predicting gold and silver prices to remain broadly flat during 2014”. Their average forecasts for the price during 2014 are:

Gold - $1,219, ranging from $1,067 to $1,379
Silver - $19.95, ranging from $16.37  to $23.94
Platinum - $1,490, ranging from $1,300 to $1,650
Palladium - $775, ranging from $660 to $863

Historically, the LBMA forecast has been quite accurate. The charts below show the actual average gold price each year against the lowest and highest forecast for the average annual price, as well as the average of the forecasts.

For both gold and silver the actual average price has fallen within the range of the lowest and highest, except for 2013. With gold the contributors appear to be more accurate as the forecast is quite close to the actual average price.

There is less accuracy in the case of silver, particularly over the past three years.

This year the low/high range is quite tight for both metals, leaving little room for error. Precious metal investors can only hope that the contributors repeat their poor 2013 forecast accuracy – to the upside that is!



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Consumer Demand For Gold Leaps 53% In Q2

Topics [ gold bull market gold bear market gold bullion coins gold bullion prices gold bullion bars ]

RESEARCH AND ANALYSIS

The latest World Gold Council Gold Demand Trends report, which covers the period April-June 2013, highlights how recent falls in the gold price have generated significant increases in demand, most notably from consumers in China and India - by far the biggest markets for gold - compared with the same time last year.

Globally, jewellery demand was up 37% in Q2 2013 to 576 tonnes (t) from 421t in the same quarter last year, reaching its highest level since Q3 2008. Demand in China was up 54% compared to a year ago, while in India demand increased by 51%.

Bar and coin investment grew by 78% globally compared to the same quarter last year, topping 500t in a quarter for the first time. In China, demand for gold bars and coins surged 157% compared with the same quarter last year, while in India it jumped 116% to a record 122t. Taking jewellery demand and bar and coin investment together, global consumer demand totalled 1,083t in the quarter, 53% higher than a year ago.

For the tenth consecutive quarter, central banks were net buyers of gold, purchasing 71t, which reinforced the trend that began in Q1 2011. Meanwhile gold held in gold-backed ETFs, which in 2012 accounted for just 6% of the world’s gold demand, fell by just over 400t, driven by hedge funds and other speculative investors continuing to exit their positions.

Overall, demand for gold in Q2 2013 was 856t, down 12% on a year ago, the WGC report said.

Download Gold Demand Trends Q2 2013



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