At a recent media briefing, Societe Generale made their predictions for the next year’s commodities prices. Though gold has been in record territory and some are concerned that the price is peaking, they predict that it will continue to be a strong investment.
Fredric Lasserre, head of commodities research, commented “We might see some gold-price rally again because of the recent fears regarding sovereign debt, and also the impact it may have on the dollar-euro.” According to the bank’s predictions, gold could advance 11% in the next year. Palladium could advance 21% and silver could advance 19%.
Societe Generale contrasted these predictions with those of other commodities, particularly farm products. The bank cited supply shocks when it stated that most farm commodities don’t seem to have much upside potential at the moment. Their prices have recently rallied, but are not expected to do so again, unlike those of precious metals.
This year precious metals performance has been led by palladium, which has advanced 75%, followed by silver, up 64%, and gold, which has advanced 24%.
Soc Gen’s statements have been echoed by other banks who have also backing been gold and silver investment for the coming year. They recommend that consumers remain overweight in precious metals, stating that they are some of the safest long positions. This confidence appears to be supported by the recent behavior of the market.