ABN Amro on Tuesday maintained its negative outlook for gold prices in 2016, mainly on expectations the US Federal Reserve would slowly raise rates into next year. "It is likely that new lows in (gold) prices will be reached before the end of the first quarter of 2016," the bank said, adding that gold prices could fall below $1,000 per ounce in the coming months.
Spot gold lost nearly 7 percent of its value in November, its biggest monthly fall since June 2013, as investors remained focused on a possibly imminent rate hike in the United States. Gold was near $1,068 on Tuesday. Higher rates could dent demand for non-interest-paying gold, while boosting the dollar. The bank expects gold prices to recover in 2017 on such factors as lower mine supply and jewelry demand.
Cyclical precious metals, like platinum and palladium, are expected to recover in 2016 and 2017, helped by increased demand for autocatalysts, industrial and jewelry from the United States, the euro zone, and China, the firm added. Platinum, which has fallen more than 30 percent this year to near 7-year lows at $820.60 an ounce, is expected to bottom out in the first quarter of next year, before rising back to $900 an ounce by year-end and $1,100 by the end of 2017. Palladium, down by a similar magnitude this year, is expected to average $535 in 2016, rising back to $650 in 2017.