Feb 032016
 

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).

forecast2016au

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.

forecast2016ag1

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.

forecast2016ratio

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.

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  • E

    Silver jumped to $15.76. What does demand look like over there? Anything like what it was during the 2008 crisis?

    • http://goldchat.blogspot.com/ Bron Suchecki

      It is a bit early for that as the big moves were overnight for us. We have had a good two weeks this month but we are expecting a strong response today. We did just have one client buy $1 million worth of gold this morning, so that is a good sign.