Precious Metals Outlook for 2013

Smart Finance

According to Reuters, gold may see record highs this year and next. However, as expectations of monetary policy stabilization in the United States and abroad continue to go unresolved, gains continue to dwindle and it’s possible that the more than decade long bull run might be coming to an end. That’s not to say that we should expect any severe drop in the price, but a plateau could be on the horizon.

Money Wise

Michael Widmer, an analyst of BofA Merrill Lynch recently said that the precious metals outlook for gold “have flat-lined across various tenors, limiting investor appetite for gold. While large output gaps in advanced nations have generally prevented a rise of inflation and inflation expectations, a likely pick-up in growth through the end of 2013 may alter this pattern, and we maintain our six-month gold price target of $2,000 an ounce.”

Silver

Silver seems to have reached a point of saturation in the market. A few analysts suspect that the precious metal will outperform previous years, but the majority of analysts think that unless demand for the metal increases we aren’t going to see much of a change. It might be wise to stay away from silver this year.

Analyst Andrea Aratoli, on a precious metals outlook discussion, said, “Concerning silver, the macroeconomic picture is important although [it] has become much more important to monitor the investment demand. It could be the only driver that can fill the gap of the surplus of production.”

Platinum and Palladium

Palladium is also expected to reach record highs in 2013, and platinum could potentially post performance exceeding that which it has reached in the past two years. One of the reasons for the strong performance speculation is due to South Africa’s problems with supply and the country’s move towards favoring industrial metals.

Anne-Laure Tremblay of BNP Paribas, on platinum, recently said that “the ongoing issues surrounding platinum mine supply in South Africa should counterbalance weakness in demand. Overall, we expect the metal’s fundamentals to improve in 2013, which will be supportive of a higher price.”

James Steel of HSBC, on palladium, said, “Palladium prices will be sensitive to any evidence of diminished Russian exports. Although there is no public information on the subject, Russian stockpiles are perceived to be dwindling. PGM ETFs registered gains in 2012 and further investor interest in 2013 may tighten underlying supply/demand balances, thereby buoying prices.”

2013 Precious Metals Outlook Summary

Palladium looks like it might very well be one of the best performers for the year. It isn’t going to be a smooth upturn though; savvy investors should keep their eyes peeled on continued sales growth in the auto industry in North America and China later this year. There hasn’t been any proof of a reduced Russian palladium stock, but the current trend definitely supports that theory. Another big factor in palladium price growth is that the current mining supply is both limited and challenging. Recycling looks to be one of the only available avenues for growth in palladium manufacturing.

Precious Metals Outlook for 2013
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