Categorized | Commodities

BMO Capital Markets Predict Precious Metals to Weaken in 2015

BMO Capital Markets Predict Precious Metals to Weaken in 2015.

gold bearInvestors will be bearish towards gold, silver, and platinum in 2015 because of a stronger greenback and with nickel and aluminum finding a strong support based on fundamental issues.

BMO had lowered its expectations for silver from $1,275 per ounce, to $1,190 an ounce. It also reduced its forecast for silver from $20.25 to $17.50 per ounce.

Natixis Commodities Research mirrors BMO’s new price predictions for gold as it released its own commodities price forecast. According to the risk management services firm, gold will be at $1,170 per ounce in 2015, and slightly increasing to $1,180 in 2016.

Natixis expects that the gradual outflows for gold-backed ETPs will persist until 2015. They don’t anticipate sharp outflows anytime soon since according to their data, most investors have already exited their positions since last year.

Apart from a stronger dollar, BMO said that the basis for their new price forecast is due to the recent downtrend of gold and silver prices. Like Natixis, BMO doesn’t also expect both precious yellow and white metals to increase in prices until the 2nd quarter of 2016 based on predictions for the U.S. dollar.

BMO believes that when treasury yields swing around the negative territory, gold price shocks occur. The good thing about this is that the real rates are now positive so gold may not decline sharply anymore based on the current relationship.

Natixis bases their forecasts on the fact that central banks didn’t purchase a lot of gold for this year. The reason for this is because most central banks who planned on diversifying with gold have already reached their goal. In an article by BullionVault, it was discussed that Russia and Switzerland are two countries that are still actively buying gold this year. Andrey Yurin, director of Moscow’s precious metals repository “Gokhran,” said that the country will buy palladium in 2015 after focusing on buying gold this year. The Swiss National Bank, on the other hand, is faced with a popular vote of buying precious metal reserves in order to return the Franc to a gold-backed currency.


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