S&P Global Commodity Insights discusses consensus price forecasts for industrial and precious metals, including platinum group metals, amid broader market trends.

Gold prices hit a new high in July after the US Federal Reserve's dovish comments and, more recently, weaker US jobs data kindled optimism of a forthcoming interest rate cut. Investors' flight to safety amid continuing geopolitical tensions drove additional demand support, resulting in upgrades to gold price forecasts. Although supply surplus and lagging demand recovery weighed on base metals prices, US rate cut expectations fueled anticipation of improved industrial demand that helped drive an upside bias for price outlooks.

Precious and industrial metals prices diverged in July as constructive US macroeconomics vied with soft fundamentals. Gold prices peaked as recent signals from the US Federal Reserve fueled expectations of an impending interest rate cut, combined with ongoing geopolitical tensions. However, base metals prices grappled with loosening supply, as slowing electric vehicle sales growth and lagging recovery in China's manufacturing and property sectors stifled demand.

Dovish tones from the Fed carried the London Bullion Market Association gold price to a new high at $2,480 per ounce on July 17. In a July 9 address to Congress, US Fed Chairman Jerome Powell acknowledged the "progress made both in lowering inflation and in cooling the labor market," which fueled prospects of a rate cut in September. Recent US economic data show inflation easing to its lowest level in over three years at 3.0% in June, while unemployment reached a 30-month high of 4.1%. As gold prices set a new record, the 10-year US Treasury yield dropped further, and the US dollar trade-weighted index dipped below 104 for the first time since March. Meanwhile, central bank purchases slowed in May, but physically backed gold exchange-traded funds were net positive in June, largely due to inflows from Europe following the recent rate cut from the European Central Bank. Concerns of political unrest on the heels of an assassination attempt on former US President Donald Trump added to the ongoing geopolitical tensions that drive safe-haven demand for gold. Consensus price forecasts for gold have been raised 1.7% for 2024 and 2.5% on average for 2025–28.

Silver price expectations are more bullish, with targets upgraded by an average 2.4% in 2024–25 and 4.6% for the remainder of the forecast horizon. Growing confidence in the likelihood of a US rate cut is fueling the upside momentum, which is supported by silver's robust industrial demand outlook, driven by its applications in automobiles, solar panels and electronics. The price of silver traded above $30/oz in the first half of July but lost footing to average at $28.65/oz in the latter half of the month.

Platinum and palladium prices moved almost at parity in the price per ounce range between $900 and $1,000 throughout July. Consensus price targets have been downgraded for both metals, with palladium forecasts lowered by a relatively more significant 1.1% on average for 2024–28, compared to a 0.7% cut for platinum. Efforts to transition to low-carbon economies buoy platinum prices, with the metal's application in vehicle emissions control and the nascent clean-hydrogen technologies.

The London Metal Exchange three-month (LME 3M) copper price rose to $9,970 per metric ton July 5, as reports of slowing US payroll growth and increasing unemployment weighed down the dollar. Bearish fundamentals prevailed thereafter, paring down the price to below $8,949/t July 30. Against a backdrop of tepid demand, global exchange warehouse stocks rose to their highest level since May 2020. Purchasing managers' indexes for June in China (National Bureau of Statistics), the US and Eurozone remained in contractionary territory, while China commercial housing sales, floorspace starts and completions fell about 20% year over year in the first half of 2024. Increased refined copper production in Indonesia and the Democratic Republic of Congo exacerbated supply pressure, but a persistent concentrate squeeze has helped cap the decline in copper prices. US rate cut expectations, energy-transition demand and an improvement in China demand — as it works to meet its economic growth target — support an upgrade of 1.1% on average to copper consensus price outlooks over the five-year forecast horizon.

Abundant stockpiles also depressed the LME 3M nickel price, which reached its lowest level year to date at $15,769/t July 25. LME nickel stocks climbed every trading day from June 7 through July 25 to reach a 2.5-year high, largely due to the arrival of China-origin nickel. The recent approval and imminent arrival of Indonesia's first LME-deliverable nickel brand will help drive up warehouse stocks going forward. Lacking fundamental support, investment fund net short positions on July 26 were at their highest since mid-February. BHP Group Ltd. announced it will suspend operations at Nickel West in Australia later in 2024, citing concerns about oversupply in the market, fueled by robust production in China and Indonesia. Nickel consensus price forecasts are up an average 1.0% in 2024–28, helped by expectations of US rate cuts, combined with prospects of a near-term weakness in plug-in electric vehicle (PEV) sales, giving way to support from the growing uptake of nickel-intensive battery chemistries.

The LME 3M zinc price reached above $3,000/t July 5, bolstered by an enduring concentrate shortfall. Consensus price targets are up 1.7% on average in 2024–26. Reflecting the concentrate tightness, China's domestic and imported treatment charges have been at their lowest level since 2013, while the nation's zinc metal imports have more than doubled year over year in January–May. Moving forward, the concentrate squeeze could slacken as projects in DRC and Bolivia commence production. Better-than-expected first-quarter growth in China's economy, robust car registration in Europe in January–May and US jobs data in June that fueled anticipation of US rate cuts drive demand support, while weakness in the manufacturing, property and steel sectors create headwinds. Although China's industrial production was up 5.6% year over year in May, floorspace starts were down and real estate investment faltered 10.1%.

The Platts IODEX 62% Fe iron ore price reached a four-week high of $114 per dry metric ton July 4 but fell below $100/dmt late July amid lackluster China steel market fundamentals. China's steel production grew 1.6% year over year in May–June, driving steel inventories higher and steel mill margins lower. Meanwhile, a lack of major policy measures for economic stimulus in the Third Plenum government meeting in mid-July in China has stifled demand prospects, just as domestic indicators show weakness in manufacturing and property sectors. The summer season is also expected to bring seasonal curbs to steel mill operations. China's iron ore imports slowed in June but remained sharply elevated in the January–June period. A stronger seaborne supply response expected with the Simandou project in Guinea starting in 2026 has helped cap the upside for consensus price targets for iron ore, which are 0.4% higher on average for the five-year forecast horizon.

Waning uptake of cobalt-containing batteries and increasing output from DRC drove the Platts-assessed European cobalt metal price to its lowest level in over five years at $13.50 per pound on July 22. China's traction battery production growth significantly decreased to 5.4% year over year in June versus a 45.6% increase in June 2023. Of the batteries installed in China-made PEVs, the share of nickel-manganese-cobalt chemistry narrowed from 33% in full year 2023 to 26% in June. Weakening consumer confidence and cost concerns have tapered the momentum of global PEV sales, which bolster expectations of prolonged cobalt surpluses. Although oversupply and falling prices have led to mine closures and withdrawn projects, China-led investments in Indonesia, Zimbabwe and DRC — where CMOC Group Ltd.'s Tenke Fungurume and Kisanfu mines reached production milestones — have maintained elevated production levels. Cobalt consensus price forecasts were lowered an average 2.2% for 2024–28.

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