06.02.202411:32 Forex Analysis & Reviews: Gold and silver to lead 2024, according to LBMA forecast

According to the latest survey by the London Bullion Market Association, gold can potentially set a new price record in 2024 compared to the previous year, even though the current year started rather sluggishly. The survey revealed divergent views among analysts regarding the primary factors influencing precious metal prices.

The survey recorded that 25% believe that the monetary policy of the United States will be the most significant factor. And with a tie—22% either think prices will be influenced by demand from central banks or geopolitical risk.

Going beyond the commonplace average forecast, there are consistent bullish sentiments among analysts. The report also notes that all surveyed analysts expect new record prices this year.

The most bullish analyst was Chantelle Schieven, head of research at Capitalight Research. From her perspective, gold prices this year could reach $2,400 per ounce, with an average price of around $2,170 per ounce.

Shiven said central banks, especially the Federal Reserve System of the USA, will begin reducing interest rates in the coming months. There is an expectation that throughout 2024, interest rates will decrease across all developed economies worldwide. Central banks' demand for gold reached a record level in 2022-2023. The period of gradual withdrawal of gold from the international monetary system from 1990 to 2008 has already passed. Now, the fear of Western financial sanctions is forcing central banks to return to the original reserve—gold. Countries are striving for de-dollarization. Consequently, against any crisis backdrop, the yellow metal may experience sudden growth over the next few years.

James Steele, chief precious metals analyst at HSBC, also turned out to be an optimistic analyst. From his perspective, gold will trade between $1,825 and $2,200 per ounce, with average prices around $1,947 for the year.

Meanwhile, analysts are even more optimistic about silver than gold. The average silver price for the year is expected to be around $24.80 per ounce. This is 6.2% higher than the average price in 2023, which was $23.35. The average price is also 7% higher than the average observed in the first month of the new year.

Julia Du, precious metals analyst at ICBC Standard Bank, was the expert with the most optimistic silver forecast. From her perspective, silver will trade between $20 and $30 throughout the year, with an average annual price of around $27 per ounce.

Her opinion aligns with other analysts in anticipating that the projected reduction in Federal Reserve interest rates could stimulate economic growth, increasing demand for silver. The correlation with gold, especially when the yellow metal is rising in price, will likely lead to higher silver prices.

Additionally, support from a weaker dollar due to expected rate cuts and a less hawkish stance by the ECB and Bank of England may help silver reach $30 in 2024.

The most bearish silver market analyst was Debajit Saha, lead metals analyst at Refinitiv. His forecasts suggest silver will trade between $20.50 and $26.76 per ounce, with an average price of around $22.50 per ounce in 2024. Presumably, gold and silver will lead the precious metals sector.

In platinum, analysts see less potential, and even less in palladium.

The average platinum price is forecasted at $1015, which is 5.2% higher than the average price of the previous year at $952.88 per ounce.

Palladium will continue to suffer as prices remain in a general downward trend. The forecast indicates an average price of around $1,060.10 per ounce for the year, significantly lower than the average price of the previous year at $1,337.39 per ounce.

Overall, analysts predict gold and silver will lead in 2024, with average prices to rise by more than 6%.