Most precious metals prices recovered a little ground last week. The gold price generally tracked movements in US real yields, ending the week roughly unchanged. The price of silver rose by around 1.5%, but strategists at Capital Economics think the decline seen since late-February will resume before long. 

Key quotes

“The earlier rise in US real yields has driven a slump in investment demand for gold but, given that we don’t expect real yields to rise further, we think a sustained decline in investment demand is unlikely. With physical demand providing something of a floor, we doubt that the gold price will fall below $1,600 per ounce this year.”

“The gold/silver ratio is close to its lowest level since 2014, and given our forecast for industrial metals prices to fall later this year, we wouldn’t be surprised if the price of silver fell relative to the price of gold. As a result, we are revising down our silver price forecast to $20 per ounce at end-2021, and $19 per ounce at end-2022.”