The interplay of a weakening global economy and central banks ready to respond with a more relaxed monetary policy should support gold and silver next year, say CPM Group experts. In addition, central banks are likely to continue to buy gold to develop their reserves, an interview with Kitco News said.
According to the CMP Group, market uncertainty is high given the “dysfunctional” policies of the US and, to a lesser extent, Europe. At the sametime, experts expect the global economy to weaken in 2020, believing that central banks are still open to easing their monetary policy should that become necessary.
A combination of all these factors could therefore support the price of gold, with the CPM Group not expecting a drastic increase. Rather, analysts expect a gradual rise to some of this year’s highs, and perhaps beyond $ 1,580 an ounce.
The CPM Group predicts a mid-year gold price of $ 1,540 per ounce for the year ahead, compared to an expected $ 1,395 for the current year. The high is expected at $ 1,580 an ounce, possibly due to geopolitical events with a breakout to $ 1,600. An important supportive factor for the gold price, according to the experts, according to the demand from the central banks remain. The CPM Group forecasts that central banks will buy 20 million ounces of gold net in 2019 and expects a similar increase in the coming year, as central bankers are interested in diversifying further out of the euro and the US dollar.
Silver should, in the opinion of the experts, in 2020 follow gold by and large. The silver price tends to perform weaker than gold at the beginning of a long-term rally, which the CPM Group also expects – to some extent – in 2020. However, it is believed that both metals would rise over the coming year.
Experts expect the silver price to average $ 17.60 per ounce in 2020 after $ 16.20 per ounce in the current year. However, the silver price is difficult to predict, as it is very volatile. The CPM Group also expects strong performance from palladium next year, albeit to a lesser extent than in previous years. Here, the experts expect an average price of $ 1,780 an ounce in the coming year, which is 17% above the mid-price of 2019. Platinum is expected to cost the CPM Group an average of $ 915 per ounce in 2020.