The Covid-19 pandemic has altered the forecasts made by various analysts, banks, and precious metal companies during the last months of 2019.
MKS is a Swiss precious metals refinery PAMP parent company. It has just published a report with the revision of the forecasts made in January 2020.
Frederic Panizzutti, its author and a managing director of MKS in Dubai, explains that for several weeks, the world practically stopped. The impact on the global economy has been considerable.
The Swiss company revised the price forecasts for gold, silver, platinum, and palladium for the second half of 2020 and the first half of 2021.
According to the report, the stimulus measures for the economy approved by the central banks amounted to more than 15 trillion dollars as of June 9. This is an unprecedented situation, which will have a long-term impact on the global economy. In the medium term, this enormous flow of capital could result in increased inflationary pressure and a loss of purchasing power, negative global growth, and also negative interest rates.
Due to this, the company has made the exceptional decision to review the forecasts made last January.
Gold
Starting with gold, MKS emphasizes that it is an investment metal and a safe-haven asset, so the interest in it and, therefore, its price will increase.
Last January, the MKS forecast for gold was at $1,699 an ounce in the third quarter. It was at 1,690 in the Q4.
These forecasts have had revisions upwards, establishing $1,770 an ounce for the third quarter and 1,830 for the fourth. The average price for the period between July 1, 2020, and the end of June 2021 will be $1,850 an ounce, with highs of 2,000.
Silver
As for silver, MKS forecasted $18.75 an ounce in January in the third quarter and $19.4 in the fourth, with an annual average of 18.62.
The forecast has had revisions upwards: $19 an ounce for the third quarter and $20 an ounce for the fourth.
July 2020-June 2021 average will be $20.05 an ounce, with highs of $23.
According to the report, the pandemic caused an increase in interest in buying gold. It resulted in a rise in the price of this metal, leaving silver behind. The gold/silver ratio shot up from around 80 points in February to a high of 125. It fell below 100 again in May. It is forecast to drop back to between 80 and 85 in the short term.
Platinum
MKS’s forecasts are not as bullish on platinum group metals. Their January forecast for the platinum price was $995 an ounce in the third quarter and $999 in the fourth. An annual average estimate for the metal was $981 an ounce.
However, these forecasts have been revised downwards, due to the fall in industrial demand.
The new forecasts point to $850 an ounce for the third quarter, $820 for the fourth, with an average of $852 an ounce for July 2020-June 2021.
Palladium
Palladium felt the effects of the fall in industrial demand, especially by the automotive sector.
In January, the MKS forecast for the metal was $2,340 an ounce in the Q3 and $2,390 in the Q4.
These forecasts have also been revised downward to $2,000 in the third quarter and 2,080 in the Q4.
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