Metals Focus, a leading precious metals consultancy, announces the publication of Precious Metals Investment Focus 2024/2025, its flagship annual report on investment in gold, silver, platinum, palladium and rhodium.
The report features comprehensive historical data and a forecast for 2024/25.
Highlights of the Precious Metals Investment Focus include:
- Gold: Spot gold prices are expected to reach new all-time highs of around $3,000 in 2025, supported by further interest rate cuts, geopolitical concerns, and portfolio diversification. After peaking at $2,686 in September 2024, prices are forecast to average $2,800 in Q1 2025 but may ease to $2,400 by year-end due to high US equity market valuations and so the potential for a correction in equities. Central bank purchases will continue to offer support, though fundamentals in a high-price environment may remain limited.
- Silver: Silver is forecast to reach $35 in Q2 2025, benefiting from gold's positive spillover effects and a persistent deficit. However, concerns about the Chinese economy could limit gains. The gold:silver ratio is expected to stay in the low-to-mid 80s, and as gold eventually loses some momentum this will see silver prices falling below $30 by Q4 2025. Despite this, the annual average price is projected to rise by 9% to $30.80, a 13-year high.
- Platinum: Platinum has been rangebound between $850 and $1,100 during 2024-to-date, supported by a sizeable physical deficit despite high above-ground stocks. In 2025, a smaller deficit, underpinned by increased autocatalyst scrap, is expected to push prices towards the upper range, with the annual average price forecast to rise by 13% to $1,070.
- Palladium: Despite significant supply deficits, palladium remains under pressure from a bearish view of long-term fundamentals and ample above-ground inventories. A reduction in the physical deficit is expected in 2025, with the potential for a return to surplus in the longer term. Price volatility remains likely, but the annual average price is projected to rise modestly by 3% to $1,010.
- Rhodium: A narrowing deficit is expected for rhodium in 2025 as softer demand from the glass and chemical sectors combines with increased recycled supply. This will likely push the annual average price down by 16% to $4,000, driven by a bearish long-term outlook and reduced investor interest.
Extract from the report:
Equities are also worth mentioning in terms of their impact on gold. As US stock markets have continued to rally, this has encouraged some investors to buy gold as a portfolio diversifier, which in turn has boosted the price of the metal. After all, price/earnings ratios are exceptionally high, so owning defensive assets like gold makes sense. Longer-term strategic investors have also expressed concerns about the direction of US government debt given scant sign of fiscal prudence in Washington.
Many of the above-discussed factors have also benefited silver. Moreover, from their respective troughs in October last year, through to their recent peaks, silver has outperformed gold somewhat. However, this outperformance (58% gain vs 48% for gold) has been limited, considering silver’s traditional high-beta relationship with gold and its robust supply-demand fundamentals. The gold:silver ratio has continued to disappoint silver bulls. It ventured down to the low-70s, around the time of a short-lived rally in base metals, but soon returned back above the 80 mark, against a long-term average below 70. In our view, this reflects the still healthy levels of above-ground bullion stocks and the fact that many of the generalist investors, that have moved into gold, are reluctant to invest in silver, which is ultimately more of an industrial commodity and does not enjoy the same quasi-monetary attributes that gold has.
Platinum group metals (PGMs) have not benefited much from the macro backdrop and gold’s rally, and investors have generally focused on their particular fundamentals and their outlook. As a result, prices over the past 12 months have been either rangebound (in the case of platinum and rhodium), or under pressure (in the case of palladium, other than a shortlived squeeze last December). The biggest headwind for PGMs remains the outlook for battery electric vehicles’ penetration of global car production and sales. This, coupled with sizeable above-ground inventories of PGM bullion, has been keeping prices under pressure, in spite of all three PGMs estimated to be in deficit this year.