Neil Meader, director of gold and silver at consultancy Metals Focus, is predicting gold prices to fall to as low as $1,670 per ounce by late 2022. Metals Focus foresees gold demand to fall by 2 percent this year, driven by decreasing retail investment and jewelry sales in China—the world’s largest consumer of gold. “As policy rates rise and inflation declines, we expect that real rates and yields will rise materially during the second half, putting pressure on the gold price,” Meader said in a June 8 note, according to S&P Global. By Naveen Athrappully for The Epoch Times

The headline numbers are this: gold bullion shipments for May partially recovered from April’s depressed levels, culminating in a year-to-date gain of 5% on the same period last year to 558 tonnes. This is the highest January to May total since 2018, says Metals Focus. By Reuben Adams for Stockhead

“Rising inflation, negative real rates and pandemic uncertainties were not enough to help gold stage a rally last year, and its price could not challenge the 2020 high,” Neil Meader, director of gold and silver at Metals Focus, said in the report’s press release. By Georgia Williams for Investing News

Demand for gold will dip this year, mainly due to weaker jewellery sales and retail investment in China due to COVID-19 lockdowns and an economic slowdown, consultants Metals Focus said. Supply of gold, meanwhile, will rise slightly as mines expand production and recycling increases, Metals Focus said in its annual Gold Focus report. By Eric Onstad, Reuters

“Even though an increasingly hawkish Fed, a rising dollar and a wider sell-off in assets then weighed on gold, the price in early June is trading close to its level at the start of the year, outperforming equities and bonds,” wrote Neil Meader, Director of Gold and Silver at Metals Focus in the report. Looking at the second half of the year, Metals Focus said that although risks and market uncertainty have risen, they expect the Federal Reserve to engineer a soft landing for the economy as inflation starts to cool and economic growth remains healthy. By Neils Christensen for Kitco

As expected on the back of silver’s price rise in 2020, silver mining rebounded in 2021 — but to a lesser degree than forecasted. Mine production was up about 5% in 2021 from 2020 levels. Recycling volumes grew by 7% as higher pricing attracted more scrap to the market. Still, Metals Focus analysts had predicted growth for mining supply to be higher, in the range of 8%. As shown in Figure 2, silver supplies have dropped into a deficit since last year, and Metals Focus analysts predict another sizeable deficit of 72 million ounces in 2022. By Investing.com

The platinum group metals (PGMs) of platinum, palladium, and rhodium all saw physical surpluses in 2021. For palladium, this was the first surplus in 10 years. But that will be short-lived, says Metals Focus, which expects a return to deficits in 2022 for palladium and rhodium, while platinum’s 844,000oz surplus will fall by over 40%. By Reuben Adams for Stockhead

Improving demand and lower supply will help palladium and rhodium swing back into deficit this year and reduce platinum’s surplus, consultants Metals Focus said on Monday. The three precious metals are used by automakers in engine exhaust systems, where they neutralise harmful emissions. Platinum is also used in other industries and for jewellery and investment. By Zandi Shabalala for Reuters

After nearly rising to a record high in early March, the US gold price has lost significant ground — down more than 10% or $200 from its peak. “The sell-off accelerated in the last two weeks in the run-up to the Fed rate decision on 4th May and in its aftermath as gold’s traditional negative correlation with the US dollar re-emerged; bond yields, both nominal and real have also risen notably,” Metals Focus says. By Reuben Adams for Stockhead

As long as there are uncertainties about global growth and inflation there could be phases where gold prices will gain because equities are likely to stay under pressure, said Harshal Barot, a senior research consultant for South Asia at Metals Focus. The base case, though, is that the bullion is likely to be under pressure, Barot said. European stocks headed for their worst week in two months as investors expect bigger interest rate hikes will be needed to rein in inflation. By Eileen Soreng for Reuters News

“silver demand (due to industrial offtake) this year appears on track to achieve a new high… This, along with limited supply growth, will result in a widening deficit in 2022,” analysts at Metals Focus said in a note. By Seher Dareen for Reuters

The market had already seen silver industrial demand start to recover during the second half of 2020 and “last year saw a continuation of much of this trend,” Philip Newman, managing director at Metals Focus, told MarketWatch. Industrial demand also managed to reach a new high despite the ongoing chip shortage and other supply-related disruptions, he said. By Myra P. Saefong for Market Watch

Yesterday, prices briefly spiked to $US1,980 – a one month high — as soaring inflation, COVID issues in China, and the Russia-Ukraine drove investors into safe havens. “Ultimately, we believe that gold prices will remain well supported in the coming months, assisted by prospects that inflationary pressure will last for longer as well as the persistence of geopolitical tensions,” Metals Focus says. By Reuben Adams for Stockhead

There are several reasons why the war in Ukraine has and will likely continue to support precious metals prices. First, the extent of the conflict, its proximity to Western Europe and the risk that it could spread to include other countries, whether intentionally or accidentally, have all pushed investors towards defensive assets. This has been particularly supportive of gold, that rallied to levels not far off its 2020 peak (in US dollar terms), and to a lesser extent silver and platinum. By Nikos Kavalis, Managing Director, Metals Focus

Adam Webb, Director of Mine Supply at Metals Focus noted “Average margins were squeezed by these rising costs, but remain high on a historical basis. Despite a 6% y-o-y reduction, at US731/oz they remained comfortably above the peak of US$552/oz reached in 2012, during the last bull run in gold.” He also added, “Should the gold price remain strong in 2022 then gold miners should continue to generate high margins, notwithstanding further pressure from continued cost inflation.” By Rajan Dhall for Kitco News

Experts at both Metals Focus and the World Gold Council believe that global reserves and the insulated nature of the gold market will prevent any significant supply challenges. “There is plenty of gold identified in current reserves and resources to sustain production at current levels for many years to come,” said Webb. “At the end of 2020, identified reserves were capable of supporting current production levels for 14 years, and identified resources were potentially able to support an additional 31 years of global production.” By Georgia Williams for Investing News