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Precious Metals Outlook for 2018

Debajit Saha, Editor, Bullion Bulletin and Senior Research Analyst, Precious Metals, Foretell Business Solutions Pvt. Ltd.

Prepared on December 15, 2017

Gold Outlook

Gold performed well in 2017 despite a strong bull market in equities and rising US interest rate. Equity investors are cautious now and are keeping gold in their portfolio to counter any volatility in market. The developed world has not yet come out of financial stress that caused massive meltdown in asset price in 2008. The entire developed economy - United States, Europe, United Kingdom and Japan - has been in the recovery mode. This exercise will continue for some more years. Investors are not convinced at present, despite strong bull run in equities, that fear is over. This sentiment will continue investor’s faith in gold. Geo-political tension will also play its part occasionally.

On the physical side, gold demand in India will increase in 2018. Indian economy is expected to grow at 7.2% in 2018, as a result of private consumption, public investment and structural reforms. This will have a positive impact on demand for physical gold. Chinese demand is expected to remain strong. 

Maximum price of gold in 2018 - $1413 per troy ounce
Minimum price of gold in 2018  - $1179 per troy ounce
Average price of gold in 2018    -  $1320 per troy ounce

Silver Outlook

Silver failed to do well in 2017 despite a strong performance by gold. What augured well for gold did not support silver. This trend is likely to continue in 2018 as investors prefer gold against silver in their portfolio. Hence, investment demand for silver will remain low. On the physical side, demand pick up in 2018 is likely to be minimal. Silver price is very unlikely to cross 2016 high of $20.71.

Maximum price of silver in 2018  – $19.90 per troy ounce
Minimum price of silver in 2018   – $15.55 per troy ounce
Average price of silver in 2018      – $17.15 per troy ounce

Disclaimer: Views are personal and not the views of the publisher.