Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
In the recently released Precious Metals Outlook 2024, the Swiss precious metals giant MKS Pamp has adjusted its forecast for precious metal prices for the rest of this year, where the original ceiling price forecast for gold in 2024 has now become the floor price.
Specifically, in the January forecast report, the average predicted gold price for 2024 was $2,050 per ounce, with a range of $1,900 to $2,200, based on the expectation of a slowdown in global economic growth leading the Federal Reserve to cut interest rates. However, so far this year (Q1 2024), the average gold price has already reached $2,070, and the forecast high of $2,200 has already been achieved.
As a result, MKS Pamp has adjusted its forecast, raising the average gold price expectation to $2,200 per ounce, with a range of $2,000 to $2,475. Analysts cite reasons for the upward revision of the gold price forecast, including strong central bank and physical gold demand, as well as gold’s sensing of signals of a collective shift in major central bank policies, indicating an inclination to accept a higher long-term inflation rate.
| Precious Metal | Average Price Forecast | Forecast Range | Actual Average Price Year-to-Date | New Average Price Forecast | New Forecast Range |
| Gold | $2,050 | 1,900−2,200 | $2,070 | $2,200 | 2,000−2,475 |
| Silver | $25 | 21.50−30 | $23.33 | $25.50 | 23−32 |
| Platinum | $1,050 | 800−1,200 | $910 | $1,075 | 850−1,250 |
| Palladium | $1,000 | 800−1,350 | $990 | $1,050 | 850−1,400 |
| Rhodium | $4,500 | 3,000−8,000 | $4,490 | $5,000 | 3,000−8,000 |
Compared to the stronger-than-expected performance of gold relative to MKS Pamp’s forecast, the performance of silver and platinum group metals so far this year has been weaker than expected. The average price of silver so far this year has been $23.33 per ounce, lower than the expected $25, while platinum, palladium, and rhodium have also underperformed. As a result, the institution has slightly raised its average forecast price for silver in 2024 to $25.50, with a range of $23 to $32. The average price of the platinum group metals has also been raised.
However, during Q2 and Q3 of 2024, gold’s relative outperformance over silver and the platinum group metals is expected to narrow.
In addition to underestimating the physical gold demand from Asia, particularly China’s central bank, another misjudgment by MKS Pamp was the continued strong performance of the US economy, leading to the Federal Reserve’s rate cuts being repeatedly delayed. Furthermore, the prediction that investors would significantly increase their gold holdings and drive up gold prices has not materialized so far. Western investors’ gold holdings remain below historical long-term levels compared to their holdings of liquid assets, other assets, and commodities.
