LBMA 2021 Precious Metals Forecasts

Sharps Pixley's 2021 precious metals forecast which are based on our fundamental and economic analysis.

Gold, Au

Range: USD 1,730 - USD 2,230
Average: USD 2,130

Gold will again show us its shiny side in 2021. Based on strong investment demand, ongoing expansionary monetary policies around the world, low interest rates and growing uncertainty over the global economic situation, we expect another strong price increase during 2021.

In addition, fundamental factors such as industrial and jewellery demand can be expected to improve going forward, while the supply side will expand only moderately. Overall, gold will retain it’s “safe haven” status for investors and offers significant price upside potential. Retail and professional investors are likely to ramp up their demand for the yellow metal, driving the price to new record highs.

Silver, Ag

Range: USD 20 – USD 43
Average: USD 38

Silver will outperform Gold in 2021. We expect to see very strong investment demand as well as increased demand from industrial applications. Strong demand from the ETF and ETP investors during the last few years has shown that investors are increasingly embracing silver as an alternative asset class to gold. In addition, retail investor demand for coins and bars looks set to continue apace with 2020 demand, which was the highest level seen in the last four years, according to the US Mint.

Furthermore, we expect refiners to face mounting pressure, as the growing divergence between production capacity shortages and increasing demand for physical silver bars and coins will intensify, leading to higher silver prices.

Platinum, Pt

Range: USD 980 – USD 1,330
Average: USD 1,280

Ongoing supply side shortages of platinum from the mining sector combined with limited refining capacity and continued processing disruptions in South Africa will result in an increasing deficit in the platinum market. On the other hand, lower automotive demand from fuel cell, electric and depressed diesel car sales along with weaker demand in jewellery and industrial sectors will offset and more or less balance out the supply shortages, resulting in only a moderate price increase when compared to other precious metals.

Palladium, Pd

Range: USD 2,230 – USD 2,930
Average: USD 2,630

The rising palladium price over the last five years was mainly driven by increasing palladium demand for the automotive sector. This year we expect to see constrained demand in that sector due to ongoing travel restrictions, lower plant capacity as a result of continued COVID-19 workplace requirements and the current economic crisis. However in 2021, mine supply growth will remain low and result in a market deficit due to strong investment demand from ETFs and new financial investment products created around ETPs.

Andreas Habluetzel
Sharps Pixley
[email protected]