Intercam Banco’s outlook for gold, silver, copper and zinc prices

Intercam Banco published on Tuesday an analysis of the outlook for gold, silver, copper and zinc prices, which have shown strength.

December saw another extension in the prices of most metals, indicating the entry into an expansionary phase.

The reopening of China improved the outlook for metals, especially copper and industrial metals, due to optimism that this would stimulate demand in the world’s main consumer.

Intercam

Investors are betting that stimulus measures in China’s property sector will improve the outlook for demand.

In addition, expectations of less aggressive rate hikes by the Fed has also improved the outlook for metals, particularly supported by a weaker dollar following the release of inflation and employment data.

Gold

The gold price has changed 4.6% y-o-y to $1,920.1 per ounce (dpo), and monthly is up 6.7%. U.S. Treasury yields fell after the country’s inflation showed signs of easing.

Against this backdrop, the price of gold surpassed the 1,900 dpo barrier on Friday, a nine-month high.

In addition, a weaker dollar caused gold to become more attractive to holders of other currencies.

Average prices are expected to average $1,750 per ounce for the first quarter of 2023 and $1,768 dpo for the second quarter of 2023. Annually, the average price is expected to be 1,830 dpo for 2023 and 1,800 dpo for 2024. The forward is at 1,936.0 dpo for April 2023 and 2,036.5 dpo at April 2024.

Silver

Silver is around the same price as this time last year, with only a 0.24% increase to 24.39; monthly gained 4.5%. The metal has benefited in the last month for the same reasons as gold.

The forward curve at May 2023 is at 24.55 dpo and at 25.71 dpo in May 2024. The average price is expected to be 21.17 dpo for the first quarter of 2023 and increase to 21.4 dpo for the second quarter of 2023.

Annually, the average price is expected to be 21.91 dpo by 2023 and 21.52 dpo by 2024.

Copper

The copper price increased 8.2 percent year-on-year to 4.155 and monthly gained 10.0 percent.

This metal reached prices not seen since June thanks to optimism that China’s reopening will stimulate demand in the world’s main consumer.

The forward curve at July 2023 is at 4.1645 dpo and at 4.1595 dpo in December 2023. Average prices are expected to be $7,800 per metric ton (dtm) for 1Q23 and rise to $8,000 dtm by the second quarter of 2023.

Annually, the median price is expected to be $8,200 dtm by 2023 and $9,050 dtm by 2024.

Zinc

This mineral rose 0.5% to $3,347.7 dollars per tonne (dpt) and at a monthly rate gained 5.6%. Zinc demand, like copper, depends mainly on construction and industrial use, so following the industrial metals it is enjoying an auspicious start to the year on the improved outlook from China.

Average prices are expected to remain at 3,335 dtm for the first quarter of 2023 and decline to 3,313 dtm for the second quarter of 2023.

Annually, the average price is expected to be 3,300 dtm for 2023 and 3,160 dtm for 2024.