2022: Gold and palladium winners silver and platinum lagged behind

Despite a strong start in the first quarter of 2022, last year proved to be a consolidation period for the precious metal market, relatively in line with expectations, according to the latest report from the London Bullion Market Association (LBMA).

The LBMA reported that gold prices averaged $1,800.09 an ounce last year, up only slightly from the 2021 average price of $1,798.60 an ounce.

The LBMA said it was a tight race in last year’s price forecast competition as analysts maintained a cautious outlook with an average price forecast of $1,801.90. The winner of last year’s forecast competition was Nicky Shiels, head of metals strategy at MKS PAMPs. She estimated that gold would average the year around $1,800 an ounce.

In second position was Nikos Kavalis, an analyst at Metals Focus, with his forecast of $1,810.00. In third place was Rohit Savant, from CPM Group, with $1,790.00.

While it was a consolidation year for gold, it was disappointing for silver as prices declined from their 2021 levels. The LBMA said silver prices averaged $21.73 an ounce last year, down from the previous year’s average price of $22.729 an ounce.

Precious metals analysts were fairly optimistic about silver at the start of 2022, looking for prices to average the year around $23.54 an ounce. Grant Sporre, an analyst with Bloomberg Intelligence, had the winning projection with a forecast of $21.78, 5 cents off target.

Taking second place was Joni Teves, precious metals analyst at UBS, with her forecast of $21.60; third place was Shiels, with a forecast of $22.00.

2022 proved to be a challenging and volatile year for gold and silver. Russia’s invasion of Ukraine created some safe-haven demand for gold and silver. Gold prices briefly to $2,000 an ounce.

However, inflation rising to its highest level in 40 years forced the Federal Reserve to raise interest rates by 425 basis points last year, its most aggressive tightening cycle in four decades.

The Federal Reserve’s aggressive monetary policy stance caused the U.S. dollar to hit a 20-year high in September. This environment saw significant selling pressure through the summer.

However, expectations that the Federal Reserve is nearing the end of its tightening cycle as it slows the pace of its rate hikes are providing some momentum for gold and silver in the new year.

Gold prices have rallied nearly 20% since its two-year lows in November. At the same, the precious metal is seeing its best start to the year since 2012, with prices up $100 in January.

Along with silver, 2022 proved to be a disappointing year for platinum, with bearish analysts claiming victory.

The LBMA said that platinum prices averaged $960.58 an ounce last year, down from the 2021 average price of $1,09.20.

Bernard Dahdah, precious metals analyst at Natixis, proved to have the closes forecast; he called for prices to average the year around $970 an ounce.

In second place was Okui Keisuke, an analyst at Sumitomo Corporation with an estimate of $980. There was a shared third-place finish between Rene Hochreiter from Noah Capital Markets/Sieberana Research and Robin Bahr, from Robin Bahr Metals Consulting, with their matching forecasts of $1,000.00.

Finally, supply issues and solid industrial demand provided solid support for palladium as the industrial precious metal saw healthy gains last year. The average price for palladium in 2022 was $2,112.06 an ounce, up from the previous average price of $1,967.64 an ounce.