Spot gold prices will rise a modest 6 percent over the next year to around $959 an ounce, as the U.S. dollar weakens and the financial crisis eases, a snap poll of traders, analysts and industry officials showed on Tuesday. The poll though showed strong gains for platinum and palladium after both metals halved or more since March peaks, even as the deepening financial crisis drives gold back toward the record high of $1,030.80 an ounce hit at that time.
Spot gold should stand at $958.60 an ounce by next November, according to the anonymous electronic poll of 196 delegates at the London Bullion Market Association’s annual conference.
The results showed slightly more bullish expectations than a similar poll conducted on Monday morning, before U.S. lawmakers had rejected a $700 billion bailout for the financial industry. The delegates had first predicted $956.50 an ounce.
Gold prices rallied overnight as other financial markets plunged, as investors rushed for safe havens fearing that the credit crisis would get worse before it gets better.
The LBMA delegation at last year’s conference in Mumbai had predicted that gold prices would rise to $843.70 an ounce by this September — not that far off Tuesday’s price of around $901, but far shy of the mid-March record high of $1,030.80 an ounce.
Despite the gloomy backdrop, 56 percent of the delegates expected the financial crisis to have eased by next year, with about a quarter expecting little change, while 62 percent said they thought the U.S. dollar would be weaker — seemingly contrasting signals for the direction of bullion.
The LBMA’s Tuesday poll also showed expectations for silver prices to rise to $13.80 by next November — more bearish than their initial projections but still up from current prices of around $13 an ounce.
The big winners were the platinum group metals, used mainly in auto catalysts and jewellery, which have halved or more since March on slowing car sales and improved supply conditions from major producer South Africa.
Tuesday’s poll found delegates at the conference, which also included PGM officials and traders, expecting platinum to rally to $1,488.20 an ounce and palladium to $390.10.
Last year the LBMA delegates had predicted platinum would hit a record $1,519.30 at the time of this year’s event, but failed to see it soaring to a record high of $2,290 an ounce in early March before plunging to $1,042 just over a week ago, its lowest in two and a half years.
They had also forecast silver prices at $16.30 an ounce and palladium at $446.20 an ounce. (Reporting by Jonathan Leff and Chikafumi Hodo; Editing by Michael Urquhart)
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