Gold Remains Focus for Precious-Metals Traders, Palladium Likely Under Pressure in 2023
NEW YORK (Dec 6) Gold is likely to remain the focus of precious-metals traders in 2023, with the yellow metal possibly rising to a record high in euro terms if inflation pressures taper, according to Heraeus Precious Metals.
The German recycler and trading firm said in a new report Tuesday that, "in times of the ongoing Ukraine war, high inflation and growing recession concerns, gold remains in the focus of many investors" and so was likely to see higher prices or at least sustained highs in the coming year.
Heraeus predicted gold to sit in a range of $1,620 to $1,920 a troy ounce in 2023, based on the idea that if the Federal Reserve tapers its hikes in interest rates and inflation eases in the U.S., gold should be more attractive to investors--given it would still act as a hedge against uncertainty from the war without being weighed upon by the dollar. Gold futures in New York were last trading at $1,783 an ounce.
To add to gold's bullishness, Heraeus said the precious metal could rise to a record high in euros--previously set in March this year at 1,870 euros ($1970.7) an ounce--if it acts "disproportionately positively" to changes in monetary policy in the U.S.. Gold prices in non-dollar terms have performed strongly this year, with gold in Turkish lira up 38%.
Aside from gold, the German firm said it expects significant pressure on palladium, saying that the market should show surplus next year. Auto demand--which makes up more than 80% of usage--is unlikely to shift, Heraeus said, with the recovery of light combustion-engine vehicles offset by electric vehicles.
It added that palladium prices sitting above platinum would encourage substitution, putting prices in a wide expected range of $1,300 to $2,250 an ounce. Prices in New York on Tuesday sat at $1,890 an ounce.
Heraeus also expects a surplus for platinum in 2023, with primary production expected to be 10% higher, though recovery from catalytic converters is likely to remain lower on higher demand for used cars. It put the range for platinum in 2023 between $800 and $1,150 an ounce. Platinum last sat at $1,001 an ounce.
Silver prices meanwhile were likely to be supported by higher demand from the smartphone industry as well as increased usage from photovoltaics. This, on top of a change in monetary stance from the Fed, should mean prices are likely to sit between $17 an ounce and $25 an ounce. Prices are holding at $22.61 an ounce.
In terms of the more minor precious metals, Heraeus predicts a range of $9,000 to $15,500 an ounce for rhodium, based on dampened demand from the auto industry. Ruthenium should also fall, with prices likely to sit between $400 and $650 an ounce based on a slight surplus. Iridium demand meanwhile is likely to have bottomed out and so should rise slightly in 2023 from increased use from the hydrogen industry, putting prices in a range of $3,700 to $6,500 an ounce.
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