UBS 2019 Metals Averages

  • Gold: $1300 unch
  • Silver: $15.80 down from $17.00
  • Platinum:  $910 down from $945
  • Palladium:  $1,130 up  from $1,040

Short Term Targets (90 days):

  • Gold: n/a
  • Silver: $15.30
  • Platinum: $875.00
  • Palladium: $1250.00


From the report…

Gold tends to set the tone across precious metals…
We expect a broadly rangebound gold market in 2019, with some upside bias. We
reiterate our outlook and price forecasts introduced in November, expecting an average of $1,300 next year, followed by modest annual gains throughout the remainder of our
forecast period to 2023. This has implications on the rest of the precious metals
complex, particularly on silver and platinum which have strong positive correlations to
… but idiosyncratic fundamental factors also matter
For silver, any downside risks to growth are likely to act as a drag, given that over half
of demand is attributable to industrial applications. But the price implications likely
come through more via the impact on investor interest. We think it would take a strong
rally in gold for silver to shake off this drag and for investors to have enough conviction
to express the upside through silver. We lower our forecasts for silver to $15.8 for 2019 from $17.0 previously, and set our 3-month target at $15.3, implying some
improvement in the gold:silver ratio. Despite a potential boost from gold, platinum is
likely to drag its feet on any move higher, given poor supply and demand fundamentals
– we continue to forecast surpluses in the years ahead. Investor sentiment remains
weak. We lower our 2019 platinum forecast to $910 from $945, and make similar
adjustments further out. Near-term, we set a slightly lower target of $875. Palladium,
on the other hand, is likely to continue having moments of defiance against gravity,
moving ahead of its peers and reacting to internal fundamental drivers. We expect
volatility to continue, and for palladium to not be immune to interim corrections,
especially during bouts of risk-off and/or soft patches in auto sales in the two key
gasoline markets, US and China. But at the same time, a tightening market suggests
that palladium will ultimately be resilient and market participants will take advantage of
price fluctuations to build positions at better levels. We raise our 2019 palladium
forecast to $1,130 from $1,040, and also lift our forecasts further out. We set a three month target of $1,250, exercising caution in chasing the market higher, especially
given weakness in equities and China car sales in recent months….

Gold between $1200 and $1400

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