The price of gold could rise to a record high in euro terms next year, according to Heraeus Precious Metals, the world's largest recycler and trader of precious metals. "In times of the ongoing Ukraine war, high inflation and growing recession concerns, gold remains in the focus of many investors," said Henrik Marx, Head of Trading - Heraeus Precious Metals, at the presentation of the company’s annual precious metals forecast.
The price of gold will strongly depend on the development of the dollar. The Heraeus experts assume that the US Federal Reserve will slightly change its monetary policy in the course of 2023. After all, inflation is likely to continue to decline and a weakening US economy will become the focus of the monetary guardians. Should the Federal Reserve keep interest rates stable or even lower them, this could support the gold price. A record high for gold in euro terms is quite possible if the gold price reacts disproportionately positively to these signals compared to the dollar. Gold marked its previous high in March 2022 at around 1,870 euros per troy ounce. Traded in the US currency, Heraeus sees a range of 1,620 to 1,920 dollars per troy ounce.
In silver, a moderate increase in demand for smartphones should support the price. For 2023, Heraeus experts expect more sales of 5G-enabled devices, which should boost silver demand. In addition, demand for photovoltaics should continue to rise in 2023. In contrast, demand for silver jewelry should decline compared to the previous year. As mine production could increase gradually, the upward price potential for silver is limited. However, if the Federal Reserve changes its aggressive interest rate policy as expected, this should depress the dollar exchange rate and support the silver price, similar to gold. Heraeus expects a range between 17 and 25 dollars per troy ounce.
For the industrial platinum market, Heraeus expects a surplus. Primary production is expected to increase by ten percent in 2023. In contrast, secondary supply is expected to decline slightly. The recovery of platinum from spent automotive catalytic converters should also decline, as demand for used cars remains high as a result of the chip crisis. In the long term, however, the use of platinum in the hydrogen economy will increase as the number of PEM electrolyser installations rises. According to Heraeus, the range for platinum is between 800 and 1,150 dollars per troy ounce.
Heraeus experts are skeptical about palladium. The market should show a surplus next year. Demand in the automotive industry - with more than 80 percent the largest customer - should hardly change, as the recovering production of light vehicles will be offset by the loss of market share in combustion engines to battery-powered electric vehicles.
The still higher price of palladium compared to platinum will further accelerate the substitution of palladium by platinum. Demand in the electrical, chemical and dental sectors will also decline again. Since around 40 percent of the palladium supply comes from Russia, possible, albeit unlikely, sanctions against the country or its raw material exporters could lead to price risks. Heraeus puts the range at 1,300 to 2,250 dollars per troy ounce.
According to Heraeus, the outlook for rhodium, which is also very dependent on demand from the automotive industry, is also rather negative. As global demand is unlikely to change much, the recovery of primary supply in South Africa next year should be enough to turn the market from a slight deficit this year into a surplus. This development will weigh on the still historically very high price. At the same time, secondary supply is unlikely to change much. The rhodium price should again move in a high range between 9,000 and 15,500 dollars per troy ounce in 2023.
For ruthenium, the return to lower price levels should continue. The Heraeus experts see a price range between 400 and 650 dollars per troy ounce. The metal, which is mainly used in the electronics industry, should show a slight surplus in 2023. Although the market could be tight at the beginning of the year, the situation should improve as soon as the stocks accumulated in South Africa are processed and the price will tend to fall.
Iridium should have bottomed out. Demand should rise slightly in 2023 due to the increasing use of PEM electrolysers in the hydrogen industry. This trend should strengthen in the following years. At the same time, supply from South Africa, which accounts for around 80 percent of global iridium supply, is expected to increase only slightly. However, there are potential risks to production next year. South Africa could continue to experience power outages next year that would limit production. This could lead to further positive price momentum in the tight iridium market. The price of iridium is likely to range between 3700 and 6500 dollars per troy ounce.
