Keep An Eye On Silver And Platinum - GFMS, Refinitiv
BOSTON - (Kitco News)- Gold and palladium are thedarlings of the precious-metals sector, but one analyst is paying moreattention to dark horses silver and platinum.
In an interview with Kitco Newsduring the London Bullion Market Association annual conference,
Johann Wiebe,lead precious metals analyst at GFMS, Refinitiv, formerly the Thomson ReutersFinancial and Risk Unit, said that while gold and palladium still have momentumto push higher in the short term, long term he sees more value in silver andplatinum.
“Silver and platinum don’t lookgreat right now, but I think their sell-off has been overdone,” he said. “Ithink we are just seeing silver lag the gold market but it can catch up fairlyquickly.”
For 2019, Wiebe said that he seesgold prices averaging the year around $1,270 an ounce and silver pricesaveraging between $15.50 and $16 an ounce.
Wiebe said that gold can continueto push higher as the speculative market rebalances and bearish investors covertheir short positions. He noted that there is a high correlation between thegold price and net-speculative positioning.
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| Chart courtsey of GFMS, Refinitiv |
Global economic risks can also continueto support higher prices, he added.
However, he also said that it isdifficult to get excited about gold since the Federal Reserve is expected toraise interest rates in December and once a quarter through next year.
“The U.S. economy is holding upfairly well and the current interest-rate hike cycle will make it difficult forgold to continue to rise,” he said.
Wiebe said that the Europeandiesel scandal will continue to support palladium in the near term, pushingprices to new records; however, he also sees a limit to how far prices canrise.
“I think prices will eventuallybe capped because there will be some switching in the auto market,” he said.“It’s expensive to switch palladium to platinum but it makes sense if the discountsare large enough.”
The primary industrial use forpalladium and platinum is catalytic converters for automobiles. Historically,palladium was cheaper, thus used for gasoline-powered cars. Platinum was moreexpensive but was required for diesel-powered vehicles.
Meanwhile, Wiebe said that he thinks it’s only amatter of time before silver prices push higher since the market hassignificant industrial demand.
By Neils ChristensenFor Kitco News
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nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |