Forecast revision also for Silver, Platinum and Palladium - Commerzbank

In addition to Gold, we have also revised upwards our forecasts for Silver, Platinum and Palladium, Commerzbank's commodity analyst Carsten Fritsch notes.

Limited upside potential for Palladium

"We expect Silver to end the year at $37 per troy ounce, Platinum at $1,250 per troy ounce and Palladium at $1,100 per troy ounce. Previous forecasts were $34 for Silver and $1,000 for both Platinum and Palladium. At the end of next year, we see Silver at $40, Platinum at $1,400 and Palladium at $1,200 (previously $36, $1,100 and $1,050 respectively)."

"Silver and Platinum should therefore rise largely in line with Gold, while Palladium is likely to rise much less. The reasons in favour of a rising Gold price can only be applied to Silver to a limited extent and hardly or not at all to Platinum and Palladium. This argues against prices gaining further ground against Gold. Nevertheless, the undervaluation of Silver and Platinum in relation to Gold remains considerable."

"Both precious metals are therefore likely to be seen by investors as a cheaper investment alternative. In addition, both markets are likely to remain structurally undersupplied. Palladium, on the other hand, could be at risk of oversupply if demand from the automotive industry continues to fall and more recycling supply from the automotive industry reaches the market at the same time. We therefore see only limited upside potential for Palladium."