World Bank Thinks Gold and Silver Have Seen Their Best Days In 2018
(Kitco News)- The gold market may have put in its best performance of theyear as the first quarter came to an end and investors looking for highersilver prices might be disappointed this year, according to the latest reportfrom the World Bank.
In its semi-annual report, released last month theinternational bank for banks, said its Precious Metals Price Index saw a 4%increase in the first quarter, following marginal growth in the first quarterof 2017.
The gains in the first three months of the year were due toa 4% rally in gold and a 6% rally in platinum prices. The analysts noted thatthe two metals were pushed higher because of “expectations of rising inflation,growing geopolitical tensions, and a weaker U.S. dollar.”
Silver prices were only slightly higher in the first quarterof 2018, compared to its gains during the same period last year.
“Silver prices edged higher on declining mine production anddespite relatively weak investment demand compared to the other two metals,”the World Bank said.
Looking ahead, the analysts said that they expect silverprices to struggle through the rest of the year. The comments come as silverprice remain trapped in a narrow trading range. July silver futures last tradedat $16.59 an ounce, down 2.6% since the start of the year.
“Silver prices are forecast to ease slightly on moderatingindustrial demand,” the report said. “More than half of silver consumption goesto industrial use. Demand from the photovoltaic and electronic sectors remainsstrong, but is being eroded by substitution and more efficient productiontechniques that use less silver.”
Turning to gold, the World Bank said that it is onlyforecasting a 3% gain for the yellow metal in 2018, which indicates the marketdoesn’t have much upside from current prices. Gold prices also remain stuck inthe middle of its trading range. June gold futures last traded at $1,319.10 anounce, up 1% since the start of the year.
“Upside risks to the forecast include deepeninggeopolitical tensions, delays in central bank rate increases, and aweaker-than-expected dollar. Downside risks include stronger economic growth,rising equity markets, a stronger dollar, and an easing in geopoliticaltensions,” the analysts said.
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.