UNITED KINGDOM May 13 2016 11:16 AM
NEW YORK (Scrap Register): BMO Capital Markets has raised its price forecasts for gold and silver , and said the yellow metal to exit the year around $1,400 an ounce and silver around $21 an ounce.
With its higher forecasts for the metals, bank analysts also hiked price targets for shares of gold- and silver-mining companies by an average of 24%.
“The more constructive (gold-silver) view is predicated on uncertainty in the global economy persisting through the remainder of this year, driving incremental safe-haven demand,” analyst at BMO noted.
“We focus a lot on China for commodities, and in our view the excess capacity built up over the last 10 years continues to be a drag on global industry and prices. In other words, what’s bad for base-metals demand is good for gold and silver,” analyst added.
BMO also commented that the gold market is factoring in little probability of a U.S. rate hike through July, so the question facing the market is whether the Federal Reserve lifts again by year-end.