Gold prices will rise for the fourth consecutive year in 2005, with dollar weakness and global security fears keeping the metal in investors' minds as a handy alternative play, a Reuters poll showed on Thursday. The global poll of 32 analysts and senior traders arrived at an average gold price of $430.00 per troy ounce in 2005, up 4 percent on 2004's $413.56. But the price was seen falling back to $413.00 in 2006, a fall of 0.1 percent on 2004.
Platinum group metals (PGMs) are tipped as the biggest precious metal losers this year, with platinum prices seen dropping below $800 on a possible supply surplus, while palladium also looked weak.
Silver is expected to firm, feeding off rising gold prices.
"The positive forces supporting gold show few signs of abating in 2005," Dresdner Kleinwort Wasserstein analyst Alexander Zumpfe said.
Gold was several analysts' top pick of the spectrum, with most expecting prices to surpass December's 16-1/2 year high of $456.75 at some point in 2005.
Spot gold was trading above $426 on Thursday morning.
Bullion's swing higher started from its 2001 near-20-year lows. The surge was fuelled by a potent mix of dollar weakness, security worries, and producer buy-backs of reserves in the ground that had previously been sold forward.
Forecasts were widely spread on this year's price - with the highest at $485 and the lowest at $390.
DOLLAR DICTATES: The course of the dollar dominated predictions owing to bullion's powerful inverse relationship with the US currency.
Bullish gold commentators broadly had low expectations for the greenback, anticipating further weakness as the United States grapples with its trade and current account deficits.
A Reuters poll of more than 50 currency strategists on January 7 showed a median forecast for the euro at $1.3300 by end-2005 compared with current levels around $1.3075. But not everybody subscribed to the bearish dollar view.
"In 2005 the dollar won't require the abolition of sin to bounce," Japanese trading firm Mitsui analyst Andy Smith, said.
Silver was beaten by gold as top performer for this year, but the part precious, part industrial metal was expected to rise 3.3 percent from 2004's $6.29 to an average of $6.50 in 2005, falling to $6.23 in 2006.
Spot silver was around $6.78 on Thursday morning.
PLATINUM, PALLADIUM: After six years of supply deficit, platinum was seen moving close to balance and possibly surplus. Demand fundamentals were largely seen remaining sound.
The metal, used in jewellery and to clean auto exhaust emissions, was forecast to average $796 in 2005, down six percent on the 2004 average $847.23, falling further to $702.50 in 2006. Spot platinum was at $867.00 on Thursday morning.
"With the platinum price closing 2004 at almost $400 more than gold, and with an increasing predilection for white gold in China, one should assume that platinum jewellery is not likely to bounce back during 2005," Rhona O'Connell of GFMS Analytics said.
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