PRICES for platinum group metals (PGMs) will rise, while gold is expected to fall under the $1 000 mark by next year.
This is the forecast from metals consultancy group Natexis Commodity Markets (NCM).
Political and economic uncertainty in recent years has pushed the gold
price faster than that of other precious metals which are influenced by
industrial demand, says NCM.
In 2011 a "mirror image" of this situation is expected with improvements
in platinum group metals (PGMs) prices as the uncertainties driving the
gold price disappear.
The gold price has already fallen back to under $1 200 after reaching a
record of $1 265 in June. But even the lower price requires a "constant
flow of gold investment" to counteract the effect of the price on 'jewelery manufacturers' demands.
At the same time it appears that gold mine production – with gold
producers' recent huge demand for gold to close hedging contracts early – will now fall to an insignificant level, says NCM.
The goal price will fall to $1 050 per fine ounce this year, and the
year's average price will fall between the recent high and low, at about
$1 125. Next year NCM expects a decline to an average of $950.
NCM predicts that the market for PGMs, in particular palladium and
platinum, will gradually drive prices upwards. It expects that motor
vehicle sales in developing countries will continue to grow, but that
petrol-driven cars will take precedence. This makes the market for
palladium more promising than that for platinum, which is mostly used in
diesel vehicles.
In 2011 the platinum price will average $1 700 per fine ounce compared
with this year's $1 600, while palladium prices will rise from an
average of $465 to $510 per fine ounce, NCM anticipates.
South African platinum mines are expected to struggle to meet demand because
of problems with electricity, security and labour.
