Austin Kiddle of Sharps Pixley offers his forecast on what’s in store for precious metals in 2014.
GOLD (COMEX:GCG14)
High: $1,350Average: $1,274 Low: $1,180
In short, we see a weak H1 as the western selling tide turns, followed by price strength in H2 as Asian buying increasingly dominates giving rise to a 4% rise for the year. As such, we expect 2014 to be a Goldilocks year — not too hot and not too cold. The biggest passion killers for gold is likely to remain prevailing U.S. dollar strength plus rising interest rates. The consensus for gold at this time seems to be robustly bearish, which for contrarians is a positive sign.
SILVER (COMEX:SIH14)
High: $25.00 Average: $21.60 Low: $18.20
Comments: As the strongest performing asset class over a decade and the worst over the last year, silver is looking very much an investment unsuitable for widows and orphans. Its volatility scares. Investors will, however, be much encouraged by the way that investment demand within the ETFs have held up so well, and this underscores silver’s growing use in industrial applications. We expect silver to record a relatively modest 8% gain on the year — that is to say maintaining its double outperformance relative to gold. The key areas to watch in 2014 should be the growth of the photovoltaics market and new applications utilizing silver’s powerful antimicrobial qualities. A strong economic recovery also should boost silver demand within the electronics and brazing sectors.
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