The average annual gold price is expected to slump by 21 percent in 2013‚ to $1‚225 an ounce‚ from an expected $1‚550/oz this year and an actual $1‚572/oz in 2011 and $1‚227/oz in 2010‚ French-based investment banker Natixis said in its quarterly metals review on Friday.
In contrast to the expected drop in the gold price‚ platinum group metals (PGM) prices are expected to rise‚ with Natixis forecasting a rise to $1‚700/oz from $1‚560/oz for platinum‚ while palladium is forecast to average $750/oz from $650/oz.
Among the base metals‚ copper continues to exhibit the strongest fundamentals‚ with exchange stockpiles falling to just one week of global consumption.
Supply is still struggling to catch up with demand‚ with problems of falling ore grades‚ resource nationalism‚ industrial unrest and energy security all contributing to an anaemic increase in global copper output.
Despite the weak global economy‚ restocking in China is driving a strong increase in apparent demand. Without an economic recovery‚ copper prices will struggle to push higher‚ but if underlying economic conditions begin to improve‚ a significant rally in copper prices remains a distinct possibility.
Natixis forecast an average copper price of $8‚250 a tonne in 2012‚ rising to $8‚750 a tonne in 2013.
Although western producers have made efforts to reduce aluminium output‚ Chinese supply continues to grow‚ spurred on by cheaper electricity and the introduction of new smelting capacity. Oversupply is therefore likely to remain a central theme in the global aluminium market.
An increase in price may be precipitated by the Indonesian interim ban on exports of unprocessed raw materials‚ effecting a squeeze from bauxite upwards.
Conversely‚ ever-increasing physical premiums may exert further downward pressure on London Metal Exchange (LME) prices.
Natixis’s central scenario is for aluminium prices to average $2‚000 a tonne in 2012‚ followed by a modest increase to $2‚250 a tonne in 2013.
The lead market has been exhibiting schizophrenic behaviour‚ Natixis says‚ with strong growth in mined output accompanying stagnation in finished metal production. Part of the reason is that lead’s cyclically defensive properties have been undermined by the mild northern hemisphere winter in 2011-12‚ resulting in widespread weakness in demand for lead-acid batteries.
