At the beginning of each year the London Bullion Market Association (LBMA) polls a range of respected precious metals analysts in the large banks and independent consultancies for their forecasts for metal prices for the coming year. This year contributors are “predicting price increases across the board for all four metals”. Their forecasts for the average price during 2016 are:
Gold – $1,103, ranging from $978 to $1,231
Silver – $14.74, ranging from $12.63 to $16.78
Platinum – $911, ranging from $748 to $1,076
Palladium – $568, ranging from $413 to $674
LBMA forecasts have been quite accurate historically. The charts below show the actual average gold price each year as a line against the lowest (bottom of red bar), highest (top of green bar) and average of the forecasts (where red and green bars meet). Note that these charts are of the yearly average, so during 2016 prices will move around these figures (see the survey for more detail).
This year the range of forecasts for gold is quite tight, indicating more consensus or confidence amongst the analysts about gold. The most pessimistic analyst is René Hochreiter who forecasts a low for gold during the year of $850 while Martin Murenbeeld sees a high of $1,375.
The LBMA analysts are less accurate in the case of silver. This year their range is wider but overall see a downtrend. Bernard Dahdah sees a low for silver of $11.00 with Philip Newman seeing silver getting as high as $19.50 during 2016.
In the chart below I’ve worked out an approximate gold:silver ratio forecasts for those analyst who forecasted both gold and silver. It is not exactly the same as an actual ratio forecast because it is just dividing an average by an average, but as gold and silver tend to move together it is a reasonable approximation.
In line with the tight ranges for gold and silver, the LBMA analysts don’t see much change in the ratio for 2016 and certainly not back down to long term averages around 50.