Precious Metals Outlook 2018

by: Georgette Boele

Silver to follow gold again

Silver prices rallied by 3% in 2017 but underperformed gold. Silver prices to weaken in 2018 because of a modest rise in US dollar and US Treasury yields, but silver prices to rally again in 2019 on US dollar weakness and slightly lower US yields.

Gold: Modest downside in 2018

2017 was a strong year for gold prices, which rallied by 11% mainly on US dollar weakness. 2018 will probably be less rosy as we expect US dollar to recover and 10y US Treasury yields to rise. Gold prices will probably move towards USD 1,250 per ounce but a short wave of position liquidation could push it to USD 1,200. This would be an opportunity to position for a gold price rally in 2019.

Platinum to outperform palladium

Palladium prices strongly outperformed platinum prices in 2017, because all the stars were aligned for palladium while negative sentiment on diesel cars weighed on platinum prices. Platinum will probably outperform palladium in 2018, because the negative scenario is reflected in platinum prices and sentiment towards palladium cools somewhat.