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Gold Price +4.9% in 2018 Says 20th LBMA Forecast

Current and ex-GFMS analysts lead bullish bullion calls for 2018...
GOLD PRICES will average $1318 per ounce in 2018 according to the average forecast made by specialist bullion analysts in the annual LBMA competition today, now in its 20th year.
That would mark a 4.9% rise from last year's annual average gold price. But it already sits 2.0% below current bullion quotes after a weak Dollar saw gold make a strong start to 2018 for US investors.
The competition, held in its current form since 1998 by professional market body the London Bullion Market Association, also covers silver, platinum and palladium. 
Out of 24 forecasts made in this year's LBMA gold price contest, seven analysts see gold averaging a price in the $1200s, while eight see prices averaging between $1350 and $1370.
The most bullish forecast comes from Philip Klapwijk, now running Hong Kong consultancy Precious Metals Insights. Formerly executive chairman of analysts GFMS, he sees gold averaging $1381 across the year.
Current head of Thomson Reuters GFMS – whose analyst Ross Strachan came second by just $1 per ounce in 2017 to Bart Melek of Canadian brokerage TD Securities – Rhona O'Connell sets the most bullish top-side target, predicting a high for the year of $1510 and an average $1360.
Both O'Connell and Klapwijk give above-consensus forecasts for silver, platinum and palladium as well as for 2018 gold prices.
Three of their former GFMS colleagues – all now at specialist consultancy Metal Focus – also post higher than average forecasts in today's LBMA competition, predicting $1370 for gold (Nikos Kavalis), $18.80 for silver (Philip Newman) and $1020 for platinum (Neil Meader).
But Metals Focus' forecast for palladium, in contrast – made by analyst Junlu Liang – is lower than the $1080 consensus, predicting an annual average of $1045 per ounce.
"[While] the palladium market is expected to remain in a sizeable structural deficit in 2018," explains Liang at Metals Focus in her commentary, "the extended rally enjoyed last year...posting all-time highs, [now means] the market is looking increasingly overbought [and] vulnerable."
Most bearish on gold, and for the 3rd year running, is Bernard Dahdah of French investment and bullion bank Natixis.
After winning the 2015 competition with an exact forecast of gold's $1160 per ounce annual average – its lowest in 6 years – Dahdah predicted $970 for 2016 and $1110 for 2017.
The outturns were instead $1251 and $1257 per ounce.
"US Dollar depreciation this year will boost US Dollar gold prices," forecasts Klapwijk in his bullish commentary today, also pointing to growing geopolitical risks on "disruptive" US foreign policy and a need for investors to "protect themselves against the increasingly overvalued US stock [and] bond market."
Most importantly in 2018, says Klapwijk, "Major central banks will risk being 'behind the curve' as inflation starts, at last, to rise a little more strongly than most expect."
Table of LBMA Forecast's average 2018 predictions and 2017 outturns
Klapwijk is currently joint-top in the all-time roster for 1st places in the LBMA's annual competition. Recording six winning forecasts, he's matched by Réne Hochreiter at Noah Capital Markets/Sieberana Research (Pty) Ltd in South Africa.
Hochreiter sees gold prices averaging $1360 per ounce in 2018, setting one of the tighter forecast ranges with a high-to-low prediction of $1430 to $1250 across the year.
The most bullish forecast for silver comes from Matthew Turner at Australian securities firm Macquarie Capital. He predicts an annual average of $20.00, and also sets the most bullish peak-price forecast at $23.00 per ounce.
"Its investor base seems to have gone in search of something a Bit more lively," Turner jokes in his commentary.
"But we think 2018 could be the year in which it finally recovers its mojo," he goes on, "with synchronized global economic growth helping silver "to re-rate against gold in line with its historical relationship to the strong performance from other industrial metals."
Last year's winner in forecasting palladium prices meantime gives this year's most bullish platinum forecast, with William Adams of specialist data and news providers Metal Bulletin predicting an annual average of $1140 per ounce.
Some 14% above today's average LBMA platinum forecast, that would mark a rise of more than $190 from last year's outcome for the metal, which finds two-fifths of its end-use demand in catalysts to clean emissions from diesel engines.
"We expect some trend reversals," says Adams, forecasting that after palladium's stellar gains in 2017, "we expect auto manufacturers to look at using more platinum in petrol autocatalysts.
"Once platinum prices are seen to have turned a corner, we would expect bargain hunting in jewellery to take advantage of platinum's discount to gold."

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