LONDON: Gold prices will lag industrial precious metals platinum and palladium in 2015, analysts polled by Reuters predict, as a gradually stabilising world economy favours raw materials over so called "defensive" assets.
A poll of 30 analysts conducted by Reuters over the last month returned an average gold price forecast of $1,225 an ounce for next year, against $1,270 an ounce predicted for 2014. That would represent a third consecutive year of losses.
A similar survey in July returned an average 2015 price view of $1,250 an ounce, suggesting confidence in gold is waning.
The metal's more than decade-long bull run came to an end last year as prices crashed by 28 percent.
Despite some strength in early 2014 as stocks and the dollar retreated, gold prices have struggled to recover, and are currently little changed on the year.
"Following a period of stability, we expect gold prices to resume their decline in 2015 as U.S. interest rate hikes and further U.S. dollar appreciation come more into focus," James Glenn, an analyst at National Australia Bank, said.
"On the other side, a better-than-expected recovery in the U.S. and global economy, and/or an easing of geopolitical tensions, would bolster demand for riskier assets and drive gold prices lower much sooner than we expect."
Silver prices are also expected to fall next year, to an average $18.90 an ounce from a forecast of $19.40 this year.
Silver is currently down just over 10 percent this year, after plummeting 36 percent in 2013, its biggest annual fall since Reuters data began more than 30 years ago.
CYCLICAL ASSETS
A return to growth would be likely to benefit cyclical assets such as industrial metals, including platinum and palladium, which are chiefly used in car manufacturing.
Both metals, unlike gold and silver, are forecast to rise in 2015, though analysts have sliced their expectations of platinum prices since the metal failed to benefit from an unprecedented five-month platinum miners' strike this year.
A poll of 23 analysts conducted by Reuters returned an average 2015 price forecast for platinum of $1,477.50 an ounce, nearly 8 percent below the forecast returned in a similar poll in July of $1,600 an ounce.
The new forecast was still an improvement on expectations for an average platinum price of $1,424 an ounce this year, however.
"The difficulties during the platinum strike were not a one-off issue," Sharps Pixley chief executive Ross Norman said. "South Africa has a long history of poor labour relations... we fully expect things to worsen in 2015."
The strike in South Africa was estimated to have cost 1.1 million ounces of platinum supply. However, the availability of plentiful above-ground stocks of the metal is said to have cushioned the market from any immediate supply shock.
Analysts saw palladium rising to an average $890 an ounce in 2015 from an expected $814.50 this year.
The metal, which hit its highest since early 2001 earlier this year, is widely seen as having a stronger demand outlook than platinum.
"We think platinum will continue to lose market share to palladium and other cheaper substitutes in the auto industry," Capital Economics analyst Caroline Bain said.
"Meanwhile, palladium above-ground stocks are believed to be significantly lower than platinum and it will also be affected by any disruptions in the South African mining industry."
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