Silver, PGMs to beat gold soon
2009-09-24 15:35:00
NEW YORK (Commodity Online): If gold is witnessing a big bull run silver and PGMs are even better placed, that is what BMO Capital Markets Global Commodity has to ay about the bullion market.
The market analysts said silver and PGMs should outperform gold as gold reaches a long-term peak annual price of well over $1,300/oz.
However, the company advised that reasons to hold gold multiply with time with considerable upside possible.
BMO Research expects gold to do well in longer term, with a considerable upside risk and a possible gold price of well over $1,300/oz under our ‘bull case’ scenario. The yellow metal will likely be energized into 2010 and 2011 amid a weakening greenback, rising inflation concerns and higher jewellery demand, which has been hit hard by the recession.
Melek also forecasts that massive US debt and dollar concerns could bode well for gold long term.
Gold could lead inflation by 12-24 months. Longer term, gold’s seven-year run is expected to continue well into 2011. ...The yellow metal should also benefit from a weaker U.S. dollar over the long term.
Another factor expected to help prices is physical demand from consumers in developing economies as disposable incomes increase, fuelling gold purchases as a store of value and status symbol," he added.
Silver and PGMs should benefit from the gold rally and the increase in global industrial activity. As such, they should outperform gold because demand for these materials will grow as investors buy them to hedge against the US dollar and inflation (like gold), as jewellery demand recovers and producers use them for manufacturing.
