London-based Natixis Commodity Markets (NCM) has forecast prices for gold to average $875 in 2008.
The investment case for gold will remain strong throughout the rest of this year and, potentially, into 2009. However, this may not lead to new highs in the gold market, said in a second-quarter metals review issued by the agency.
?Despite the efforts of monetary authorities around the world to contain the impact of the sub-prime crisis on financial markets and the global economy, their outlook remains questionable,? report said.
Many of the factors that have supported the bull market for the precious metals remain in place. Inflationary pressures associated in part with the dramatic rise in commodity prices are continuing.
The other key supporting factor is the increasing acceptance of commodities as an asset class. However these positive fundamentals do not necessarily justify a straight progression for precious metals prices.
NCM believes that the investment case for gold will remain strong throughout the rest of this year and, potentially, into 2009. However, this may not lead to new highs in the gold market.
?The key trend will be the ability of the individual precious metals to hang onto their bull market gains. We slightly favour the platinum group metals with their relatively tight fundamentals, rather than gold and silver, which require continued buying from the investment community to support high prices. We are forecasting an average annual price of $875 per oz for gold and $16.50 per oz for silver, which implies slightly weaker prices as the year progresses,? report said.
With a continuing positive climate for investment and with risk-aversion remaining a feature, NCM has forecast platinum prices to remain positive in 2008. ?We do not expect the platinum price to fall below $1,700 for the remainder of the year, with risks more biased to the upside,? report said.
For the year as a whole, NCM has projected an average annual price of $1,950 per oz.