Although gold is off its nearly seven-year highs reached in the first week of the year, investors can still look forward to higher prices, according to one precious metals refining firm.
In their outlook forecast for 2020, analysts at MKS PAMP Group said that they remain bullish on gold, silver and palladium for the new year. However, gold will remain the “go-to” metal for investors looking for a safe-haven hedge as volatility and uncertainty are expected to dominate investor sentiment.
In the report published Wednesday, the analysts see gold prices pushing to a high of $1,780 an ounce with prices averaging $1,636 this year. Meanwhile, the precious metal is expected to hold support at a low of $1,520 an ounce.
“The key factors moving gold this year shall be geopolitics and politics. The ongoing tensions in Middle East need to be followed closely and shall remain one of the key drivers for Gold,” the analysts said. “The US presidential elections could trigger additional volatility to precious metals and to the USD which could marginally weaken.”
The outlook comes as gold prices find support around $1,550 an ounce. The precious metals refiner also expects gold to be supported as central banks maintain accommodative monetary policy in a low global growth environment.
The analysts also said that they expect central banks will continue to be net buyers of gold. “In this complex environment, Gold shall remain an asset of choice against market risks,” the analysts said.
The firm is also bullish on silver, even if it continues to trade in gold ’s shadow through 2020. MKS said that they see silver prices pushing to a high of $21 an ounce and average the year at $18.62.
“While fundamentals seem to be slightly brighter, they are still not shining. Silver will attempt to further recover, yet shall remain very volatile and prone to corrections on the back of speculative profit taking as it moves higher,” the analysts said.
Among Platinum Group Metals, the analysts are extremely bullish on palladium and they see little downside as demand is expected to remain strong as supply continues to drop.
The refiner sees palladium prices rising to $2,400 an ounce and average the year at $2,288 an ounce. “All key factors that propelled Palladium to new highs in 2019 remain in place in 2020,” the analysts said. “We expect palladium to remain in the spotlight again this year!”
The analysts added that any correction on palladium could prove to be short-lived and met with aggressive buying. Finally, the analyst are a little bit more cautious on platinum as the market continues to deal with a glut of supply. For 2020, the analysts see platinum prices rising to $1,080 an ounce and average the year at $981 an ounce.
“The diesel automotive sector market continues to be under pressure and global growth is expected to slow down over the short medium term, a few key factors that will prevent platinum from rallying substantially,” the analysts said. “Platinum could move slightly higher over the course of the year yet, remaining vulnerable, should we experience a short-lived correction in palladium.”