German Commerzbank becomes bullish on gold for 2014
Frankfurt-Germany (Dec 6) Commerzbank looks for gold and other precious metals to slowly regain their luster in 2014.
The bank listed a full-year average forecast of $1,300 an ounce for gold, but also looks for the metal to climb back toward the $1,400 area by year-end. Other full-year average forecasts include silver, $21.50; platinum, $1,475; and palladium, $760.
Frankfurt-Germany (Dec 6) Commerzbank looks for each of these metals to rise further in 2015, calling for gold to average $1,425 then, silver $24.50, platinum $1,625 and palladium $840.
“The gold price is likely to recover from its historic slump this year and increase moderately in 2014,” Commerzbank said in an outlook released Friday. “Investment demand should gradually revive. In conjunction with robust demand from Asia, this indicates upward movement in the gold price to $1,400 per troy ounce by the end of 2014.
“In the wake of gold, and boosted by growing industrial demand, the silver price should also be able to make good some of its losses next year. As a result of supply problems and rising demand, platinum and palladium are also likely to show supply deficits in 2014, supporting higher prices.”
Another noteworthy feature to the market in 2013 was a shift in demand to Eastern from Western nations, with Chinese demand especially strong, the bank said.
Commerzbank said it sees short-term downward risk in gold, but upward potential from the middle of 2014. Commerzbank looks for gold to average $1,200 in the first quarter, then $1,250 in the second and $1,300 in the third. The key, the bank said, will be investment demand.
“Stronger investment demand is essential for upward movement in the gold price,” the bank said. “The most important question will therefore be when the negative trend amongst ETF (exchange-traded-fund) investors will be
reversed. If strong demand from Asia can no longer be satisfied out of ETF holdings, as has been the case this year, the gold price is likely to rise.”
“Speculative financial investors have now largely exited the gold market, as
evident from the fact that net-long positions are at a seven-year low,” Commerzbank said. “The negative market sentiment towards gold is also reflected in negative media reports and for the most part pessimistic price forecasts. All of this may indicate a rapid reversal of the trend. After the price has successfully bottomed out, gold ETFs should report inflows again from the second quarter, supporting the price recovery.”
