Thursday, in its annual report, the LMBA said that 38 market analysts participated in this year’s forecast survey. Gold prices are expected to average $1,973.80 an ounce, up 11% from the 2020 average. However, the outlook is only a modest 4.5% increase compared to the average price seen in the first half of January.
“Gold is expected to be subjected to a high level of volatility in 2021, with the widest forecasts predicting a high/low range of $1,192 compared to $780 in 2020,” the LBMA said in the report.
With the gold market expected to be relatively tame through 2021, the LBMA said it expects all eyes to be on silver. Precious metals analysts expect silver prices to average $28.50 an ounce this year, an increase of 38% from the 2020 average price and up 8% from the average price since the first half of January.
The volatility seen in the silver market this past week could foreshadow the price action through the rest of the year.
“Silver is undoubtedly the star of the show,” the LBMA said. “Silver is forecast to be the best-performing metal in 2021, but with a trading range of $38.5, nearly five times its range forecast last year, it looks as if it’s in for a real rollercoaster ride in 2021.”
Looking at the Platinum Group Metals (PGMs) market, analysts are expecting to see a reversal of fortunes between platinum and palladium. Analysts see platinum averaging 2021 around $1,131.50 an ounce, up 28.2% from the average price in 2020.
Meanwhile, analysts expect palladium prices to average this year around $2,439.10 an ounce, up more than 11% from the average price seen last year.
“The market was in love with palladium last year, and it proved the star performer, posting an impressive 52% increase in price in 2020. But analysts are predicting that it will be the worst-performing metal this year,” the LMBA said.
As to the important factors driving precious metals prices in 2021, the report noted that 25% of analysts said that low to negative interest rates would be positive tailwinds for gold, silver, and PGMs.