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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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