“With the military conflict in Ukraine, high inflation and growing fears of a recession, gold remains the focus of many investors,” said Henrik Marks, Head of Precious Metals Trading at Heraeus Precious Metals.
The price of gold will be highly dependent on the dollar. Heraeus experts suggest that the US Federal Reserve will slightly change its monetary policy during 2023. In the end, inflation is likely to continue to decline, and the weakening US economy will be the focus of monetary authorities. If the Fed keeps interest rates at the same level or even cuts them, this could support the price of gold. A record high for gold in euros is entirely possible if the price of gold reacts disproportionately positively to these signals relative to the dollar. The previous high for gold was in March 2022 at around 1,870 euros per troy ounce. If forecast in dollars, then Heraeus sees a range from $1620 to $1920 per ounce
In silver, moderate growth in smartphone demand should support the price. In 2023, Heraeus experts expect an increase in sales of 5G-enabled devices - this should increase the demand for silver. In addition, in 2023, the demand for solar panels should continue to grow. On the contrary, the demand for silver jewelry should decrease compared to the previous year. Since mine production may increase gradually, the upside potential for silver prices is limited. However, if the Fed changes its aggressive interest rate policy, as expected, this should depreciate the dollar and support the price of silver, similarly to gold. Heraeus suggests a range between $17 and $25 an ounce.
Heraeus expects a surplus in the industrial platinum market. Primary production is expected to increase by 10% in 2023. On the contrary, the secondary supply should decrease slightly. Recovery of platinum from used car catalysts should also decline as demand for used cars remains strong as a result of the chip crisis. However, in the long term, the use of platinum in the hydrogen economy will grow as the number of TEM electrolysis plants increases. According to Heraeus, platinum prices will range from $800 to $1,150 an ounce.
Heraeus experts are skeptical about palladium. The market should show a surplus next year. Demand for palladium from the automotive industry - more than 80% of the consumer - should remain virtually unchanged as the effects cancel each other out. Automotive production is recovering, but internal combustion engines are losing market share to battery-powered electric vehicles.
The continued higher price of palladium relative to platinum will further accelerate the process of replacing palladium with platinum. Demand in the electrical, chemical and dental industries will also decline. Since about 40% of palladium supply comes from Russia, possible - though unlikely - sanctions against that country or exporters of the raw material could lead to price risks. Heraeus sets a range of $1300 to $2250 an ounce.