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Gold prices are forecast to rise above $2,200 an ounce in 2013, supported by central bank stimulus action.

04 Oct 2012

NEW YORK (Commodity Online): Silver prices are expected to average $44 an ounce in 2013, said Deutsche Bank in a quarterly commodity research note.

Deutsche Bank raises its 2013 silver prices forecast by 3% from their previous estimate. Their 2012 fourth-quarter average estimate for silver is $37 an ounce, also down 2.6% from their previous forecast.

According to the Deutsche Bank, gold prices are forecast to rise above $2,200 an ounce in 2013, supported by central bank stimulus action.

The move above $2,200 would be an extreme, if it occurred. Commodity prices can be prone to overshooting. Their 2013 average estimate for gold is $2,113, which is a 3% rise above their previous estimate. They see gold prices averaging $1,850 in the fourth quarter of this year, which is a 2.6% discount to their previous estimate, said the largest German bank.

“We believe the major beneficiary of a third round of quantitative easing by the U.S. Federal Reserve and fiscal cliff fears will be the precious metals complex. Not only will it keep U.S. real interest rates negative for the foreseeable future, but, it will sustain U.S. dollar weakness, in our view,” the bank added.

The German bank also noted that, PGMs will benefit not only from QE3, but also from the supply disruptions in South Africa, and the prices could rise further next year. Their one caveat is that “positioning risk” is building – referring to the growth in bullish positions in the PGM futures markets.

The South African strikes have left the market in balance in regards to supply and demand and any supply problems could push platinum prices to a premium over gold. There are limits to the strength in platinum, however, because of likely lowered European car sales, they added.

Their 2012 fourth-quarter average estimate for platinum is $1,575 an ounce, down 3.1% from their previous forecast. They put 2013 average platinum prices at $1,644, down 3.3% from their previous estimate. Palladium 2012 fourth-quarter prices are seen averaging $630 an ounce, down 12.5% from their previous outlook, while the 2013 forecast is $700, down 6.7% from before.

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