Second firm predicts stable precious metal prices

Another analyst has told National Jeweler that he expects gold and silver prices to remain relatively steady in the foreseeable future, as investors normalize their approach to buying in light of the improving global economy.

Michelle Graff michelle.graff@nationaljeweler.com

New York--The wild ride is over, or at least on pause, for now.

A second precious metals analyst told National Jeweler that he expects gold and silver prices to remain relatively steady in the foreseeable future, as investors normalize their approach to precious metal buying in light of the improving global economy.

Philip Newman, a director at London-based Metals Focus, which just published its silver five-year forecasting quarterly, said that the per-ounce price of silver has picked up as of late due to uncertainty in the Middle East and concerns about the banking sector in Portugal.

After trading at $18 to $19 per ounce, the metal is now trading above $20, closing Monday at $21.13 per ounce on the London fix, according to Kitco.com.

The same has been seen with gold (the per-ounce price of the two metals broadly moves in tandem), which was trading around $1,250 per ounce before topping $1,300 again, closing Monday at $1,306 per ounce on the London PM fix, according to Kitco.com.

Newman said he does not see the metals continuing to build on these gains and expects a correctional slump later in the year, but not a massive one. Prices for both metals will trade in a narrow range for the foreseeable future, hitting a low at some point in 2015.

He said there is less volatility in the metals markets now because investors are balancing their portfolios. This mirrors the forecast recently given by Andrew Leyland, a London-based metals analyst with GFMS, Thomson Reuters, who described silver, gold and platinum prices as “range-bound” in a quiet market.

The price is not being driven up precipitously by investors rushing into the market to buy massive amounts of precious metals as they did in 2008, 2009 and 2010. On the flip side, it also is not seeing a great drop in price, which occurred in 2013 and earlier this year when many investors exited at once.

On the demand side, Newman said that silver jewelry has been picking up in recent years in the U.S. He said the market also saw increased demand for karat gold jewelry last year, though this isn’t expected to have a long-term impact on silver.

“The sticker-price shock of 2011, 2012 has faded. As karat gold comes back (though) I don’t see it taking real estate

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from silver jewelry,” Newman said, noting that consumers’ return to buying 10- and 14-karat gold is more likely to detract from the market for gold-plated jewelry.

He said he expects demand for both silver and karat gold jewelry to continue to increase in the coming years.

While the gold and silver markets have been, and are expected to remain, relatively quiet, palladium has experienced a recent run-up in price. This is due to increased auto catalyst demand in the U.S. and China, the strikes at the platinum group mines in South Africa, which have left the metal in short supply, and uncertainty about embargos on Russia, the world’s largest miner of palladium, Newman said.

The metal’s per ounce price hit a 13-year high last week, closing at $873 per ounce Wednesday on the London PM fix, according to Kitco.com.

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.