2022’s new record high gold prices saw global mining output rise by 1% to the 2nd highest total on record behind 2018, according to precious-metals supply and demand specialists Metals Focus. Now the consultancy’s new Gold Focus 2023 report forecasts that will grow by 2% this year to a fresh high above 3,650 tonnes, with expanded output from all regions except Asia. By Bullion Vault

Demand for gold will drop 9% to 4,375 metric tons this year with central banks’ appetite falling from last year’s all-time high, consultancy Metals Focus said, adding that gold prices would be under pressure in the second half of 2023. The net official sector purchases jumped 141% to a record high of 1,083 metric tons in 2022 amid de-dollarization activity, inflated by Western sanctions on Russia after its invasion of Ukraine. By Polina Devitt for Reuters

Gold demand is expected to drop by 9% in 2023 as central banks slow their official purchases of the precious metal after a record year, with prices also facing downward pressure in the second half of 2023, according to Metals Focus “The projected 9% drop in demand is almost entirely down to a fall in net official sector purchases from last year’s all-time high; most other demand sectors will see modest growth,” Metals Focus said in its Gold Focus 2023 report published Wednesday. By Anna Golubova for Kitco News

Electric vehicles don’t need catalytic convertors, and therein lies the conundrum for PGM producers, which are relying on an emergent hydrogen economy to take up the slack in demand. (PGMs are used as catalysts in electrolysers and fuel cells). “There are differing views on the pace of vehicle electrification by various stakeholders,” Metals Focus writes. “Furthermore, the uncertain growth trajectory of the hydrogen economy is also contributing to disparate opinions.” By Reuben Adams for Stockhead

Consultants Metals Focus forecast a 953,000-ounce platinum undersupply, up from just 53,000 ounces in 2022. The forecasts use slightly different methodology, with Metals Focus excluding platinum bought or sold by exchange-traded funds. By Reuters

Platinum, palladium and rhodium markets will see their biggest deficits in years in 2023 but undersupply is unlikely to lift prices much, consultants Metals Focus said on Monday. All three metals have similar physical and chemical properties, and are chiefly used in vehicle exhausts to neutralise harmful engine emissions. By Reuters

“Imports went up in 2022 as demand rose after two years of Covid-19. But now the situation has normalised and imports will come down. But the high prices will dent the demand by 15 -20 per cent,” said Chirag Sheth, principal consultant of Metals Focus, an independent precious metals research consultancy. By Sutanuka Ghosal for The Economic Times

“We are moving into a different paradigm for the market, one of ongoing deficits,” said Philip Newman at Metals Focus, the research firm that prepared the Silver Institute’s data. “Silver demand was unprecedented in 2022, and we don’t say that to try and be sensational, that is the only way to describe the market,” Newman stated in an interview with Kitco News this week. By Rick Mills for Mining.com

That being said, Metals Focus gave a very succinct presentation of the silver market and their very forward-looking view of the price for the white metal for the coming year. There will be silver supply deficit for the next few years. Additionally, in their note they mentioned that “the combined shortfalls of the previous two years comfortably offset the cumulative surpluses of the last 11 years”. By
G. Miguel Perez-Santalla for Kitco News

“Silver demand was unprecedented in 2022, and we don’t say that to try and be sensational that is the only way to describe the market,” Neman said. “The silver market has entered a new paradigm of deficits that kicked off in 2021.” Looking ahead, The Silver Institute and Metals Focus expect silver to post another “sizable deficit,” even if it is down from last year’s record highs. Analysts expect solid demand will create a market deficit of 142.1 million ounces in 2023. by Neils Christensen for Kitco News

“We are moving into a different paradigm for the market, one of ongoing deficits,” said Philip Newman at consultants Metals Focus, which prepared the Silver Institute’s data. But he said this wouldn’t necessarily cause prices to shoot higher because while visible silver inventories are falling, huge amounts of metal held by individuals and investors can still fill supply gaps. By Peter Hobson for Reuters

In a recent interview with Kitco News, Philip Newman, managing director at Metals Focus, said that even if silver demand falls from last year’s highs, it remains elevated by historical standards. “Coin and bar demand since the pandemic have been eye-watering high,” he said. “Global demand for gold and silver are expected to remain healthy through 2023.” By Neils Christensen for Kitco News

Gold is unlikely to hold the $2,000 an ounce level in the long term unless the Federal Reserve communicates a clear pivot in its messaging, said Philip Newman, managing director at Metals Focus. The gold space surged after the banking turmoil, and prices continue to trade well above $2,000 an ounce. But that trend will not last into the second half of the year, Newman told Kitco News. By Anna Golubova for Kitco

At US$1289/oz, average AISC globally in the September quarter was at record levels according to the Metals Focus Gold Mine Cost Service. “This significant rise in costs has largely been driven by inflation of almost all input costs for miners,” director of mine supply at Metals Focus Adam Webb said at the time. “In particular, a tight labour market in many major gold producing countries has led to increasing wage rates and therefore rising staff costs. By Josh Chiat for Stockhead

Platinum, palladium and rhodium, prized for their use in catalytic converters in internal combustion engine cars, remain below their pandemic and post-Ukraine invasion highs. Palladium, which briefly topped US$3000/oz a year ago, is down to US$1444/oz, while platinum remains sub US$1000/oz. Meanwhile, rhodium prices remain under pressure according to analysts at Metals Focus. “Since rhodium’s fifth and latest failed attempt to break through $30,000 in May 2021, the price has been under pressure,” they say. By Josh Chiat for Stockhead

Fed policy – and market expectations around Fed policy – has been a particularly important driver of gold prices in recent months, says Metals Focus. “Much of the price upside seen in Q4.22 reflected investor expectations that the Fed would turn more dovish, anticipating modest rate increases in H1.23, before seeing cuts emerge during H2,” it says. By Reuben Adams for Stockhead