Gold prices should remain rangebound,
caught between deflationary
pressures and the potential that
monetary authorities will jump-start the
global economy by reflating
􀀗 For silver, we expect a modest
recovery on the back of ongoing ETF
purchases, relatively resilient jewelry
demand, and strong coin and bar sales
􀀗 For PGMs, we believe that current prices
are unsustainably low and that the
market has been unduly undermined by
investor selling; another round of
production cuts could spur prices to rally
Metals price outlook and forecasts
Gold: Deflationary pressures and ongoing investor
deleveraging could weigh on prices in 2009, but financial
market uncertainty and possible USD weakness are potential
sources of support. Stagnant mine output, limited official
sector sales, and robust ETF and retail demand should also
support prices, but any rallies near USD1,000/oz could to
undermine jewelry and EM demand, we believe.
Silver: Lower-than-anticipated growth in mine supply
should be offset by reduced industrial demand. Hedge fund
liquidation may have run its course. And good retail and
ETF demand could spur the market in 2009.
PGMs: Plunging global auto output will limit demand in
2009, but production cuts should moderate platinum and
palladium surpluses this year. Palladium could get a boost
from Russian stockpile uncertainty.

Deflated expectations
􀀗 Gold faces pronounced deflationary pressures, but safe-haven
buying due to financial market uncertainty and potential USD
weakness may support bullion, we believe
􀀗 A sharp drop in growth of silver mine output should offset
declining industrial demand; a rally in silver prices could depend
on investor interest, steady ETF purchases, and robust demand
for coins and bars
􀀗 We expect platinum to move into modest surplus, based on weak
demand for autocatalysts and cuts in mine production; palladium’s
surplus is narrowing due reduced production; dwindling Russian
stocks could support prices