Metal Focus said that there is growing evidence that Chinese consumers are once again turning to gold jewelry as a quasi-investment and demand is being driven but growing geopolitical uncertainty, slowing of the domestic economy and the ongoing COVID-19 pandemic. “Following the healthy Chinese New Year sales results, jewelry retailers are optimistic about the year ahead. Their attention is now shifting to the upcoming Valentine’s Day and Lantern (Yuan Xiao) Festival jewelry buying occasions,” analysts at Metals Focus wrote. By Neils Christensen for Kitco news

“Now the expectation is of five rate hikes. In a sense, market expectations of monetary policy have turned increasingly hawkish, which is negative for gold because we’ve seen a lot of strength in the two-year yields and we’ve also seen that boosting the dollar index,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus. By Asha Sistla for Reuters

In a weekly report Wednesday, Metals Focus said it expects total platinum group metals demand to grow by 11% to top 12.8 million ounces this year — 1.2 million ounces more than 2021. It expects an improvement in automotive manufacturing as well as tighter emissions legislation in major markets, to drive that growth in demand. By Myra P. Saefong and Mark DeCambre for Market Watch

According to Metals Focus, a growing global automotive sector has driven combined autocatalyst demand for platinum, palladium and rhodium (PGM), which rose by 5% in 2021 and expected to hit record levels in 2022. The consultancy said that the total PGM demand is expected to grow 11% breaching 12.8Moz in 2022. “This is 1.2Moz more than 2021 and 200koz higher than pre-pandemic levels, despite expectations that vehicle numbers will still be lower than in 2019,” the authors of the report noted. By Vladimir Basov for Kitco News

With supply growing, prices were impacted by softening demand throughout H2 2021, particularly in the automotive industry. “The biggest factor that impacted palladium demand this year is the protracted and deepening chip shortage,” said Wilma Swarts, director of platinum-group metals at Metals Focus, in December. “Vehicle production forecasts for 2021 were cut by around 10 million vehicles from the start of the year until now.” By Georgia Williams for Investing News

Metals Focus reported today that silver will play a crucial role in a burgeoning green economy and that rising demand has already put silver market into a physical deficit, which has a strong likelihood of becoming structural. According to a report, the star of silver use in the green economy over the last decade has been photovoltaics (PV), with PV installations have grown massively over the last decade, up from a modest 16GW in 2010 to 158GW in 2021. By Vladimir Basov for Kitco News

“A bigger surplus in the platinum market this year (2021) also offers little comfort, itself the result of a recovery in South African mine output along with weaker than expected growth in autocatalyst demand, due to chip shortages and other supply chain disruptions,” Metals Focus states in a market report. By Georgia Williams for Investing News

Chirag Sheth, Senior Research Consultant at Metals Focus discusses with CNBC-TV18’s Manisha Gupta outlook for precious metals in 2022. On gold prices, Sheth said, “We believe that in the near term, probably over the next three to four months and gold prices should remain strong, we could again see prices moving up to $1,900.” By Manisha Gupta for CNBC TV18

Gold and silver demand in India recovered sharply in the second half of 2021 as jewelry purchases and investment in physical metal surged following a downturn caused by COVID-19 restrictions and uncertainty. This was reported by Metals Focus, a leading independent precious metals consultancy, on the heels of a trip by its local team to more than ten cities in India to assess the situation on the ground, which revealed robust demand for gold and silver. By Vladimir Basov for Kitco News

There are better days coming soon for palladium as Chinese purchases pick up and supply chain problems eventually ease, according to Nikos Kavalis, managing director at Metals Focus. “We therefore expect a big rebound in demand, which should also be augmented by stock replenishment in China after a year of extremely low imports,” he said. “The market will move back into deficit in the second half of next year, driving prices up.” By Ranjeetha Pakiam and Yvonne Yue Li for Bloomberg

“Lower prices and pent up demand has helped boost sales, but we are also seeing a lot of weddings this year with some estimates suggesting that we could have a record number,” said Chirag Sheth, a Mumbai-based consultant with Metals Focus. “What has happened in the past year and a half has revived people’s faith in gold.” By Swansy Afonso for Business Standard

Adam Webb, director of mine supply at Metals Focus, echoed this forecast, noting a small quarter-over-quarter decline between Q3 and Q4 2021. “We expect gold output to remain relatively high in Q4 2021, but drop quarter-on-quarter,” he said. “This will largely be a result of the seasonality of production in Russia, which usually declines in the winter months.” By Georgia Williams for Investing News

Inflation will also impact the sector’s supply side, as Adam Webb, director of mine supply at Metals Focus, pointed out. “As with gold miners, inflation will push costs up for silver miners,” he said. “However, silver mines often produce significant quantities of by-product metals, usually zinc, lead and gold.” By Georgia Williams for Investing News

Silver’s relation to gold and ties to the base metals sector helped it rally to a year-to-date high in Q2. “After touching a four-month low of US$23.78 at the end of March, silver began to recover, reaching a three-month high of US$28.90 by mid-May, as support emerged from a weaker dollar and from the slide in yields over much of this period,” the annual “Precious Metals Investment Focus” report from Metals Focus reads. By Georgia Williams for Investing News

“If inflation continues to come out strong, that would cement expectations for the start of rate hikes by mid-2022. But the gold market has largely priced such rate hikes, so gold’s decline should be temporary and limited,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus. By Nakul Iyer for Reuters

Metals Focus, one of the world’s leading precious metals consultancies, expects silver to benefit from an improving gold price in early 2022. This was reported in Metals Focus’ recent release of “Precious Metals Investment Focus 2021/2022”, its flagship annual report on investment in gold, silver, platinum and palladium. By Vladimir Basov for Kitco News