Precious Metal Outlook 2021: Prices to Go Down

WikiFX News (15 Feb.)-Precious metal prices have stabilized recently as the improving prospects for the global economy has reduced demand for safe-haven assets. Some precious metal prices surged early in the pandemic as uncertainty overshadowed the global economy. But prices are projected to be lower in 2021 as the global economy recovers.

As the economy improves this year, industrial demand will support silver and platinum group metal prices. We expect silver prices to reach $30 per ounce by the end of the first quarter and eventually level off to $27 per ounce by the end of 2021. Silver is currently trading around $25 per ounce.

Platinum will rise to $1,250/oz by the end of 2021. Palladium could also hit $2,900 per ounce in 2021, roughly 21% above current levels.

As for gold, the ongoing dollar weakness and low real interest rates will keep all precious metals prices elevated in the first quarter of 2021. However, gold will then weaken in the second quarter as the macroeconomic backdrop improves. Hence we expect that gold will struggle to attract sufficient ETF inflows to sustain prices north of $1,900, and the asset will finish the year 2.5% lower than current levels, at $1,800 per ounce.