Gold prices may rise to the 6,000 USD/ounce mark by the end of this year, while the gold/silver ratio is forecast to continue to expand, as macroeconomic and geopolitical risks remain. This assessment was made by Mr. David Wilson - Commodity Strategy Director of BNP Paribas SA in an interview with Bloomberg Television.
According to Mr. Wilson, although the gold/silver ratio is still lower than the average of the past two years (around 80), it has recovered significantly and there is still room to increase. "I think there is still room for these two metals to continue to'dismatch'. Gold provides the ability to hedge against risks that silver cannot provide at the same level," he said.
Gold's prospects continue to be strengthened by persistent buying from central banks. Notably, Poland has just announced plans to buy an additional 150 tons of gold, after becoming the world's largest gold buyer last year. In addition, capital inflows into gold ETFs remained stable, only recording a short decline in the market correction last week, before quickly recovering.
Many large financial institutions, including Deutsche Bank AG and Goldman Sachs Group Inc., also support the scenario of gold prices recovering and continuing to increase thanks to these long-term drivers. Further strengthening the formal demand picture, the Central Bank of China extended its gold buying streak to the 15th consecutive month in January.
Meanwhile, the silver market has witnessed strong fluctuations in recent months, mainly due to increased physical purchase demand, especially in Asia. However, according to Mr. Wilson, the physical market is showing signs of cooling down as silver supply gradually flows to Europe and Asia. In addition, the upcoming Lunar New Year holiday is likely to further weaken silver demand in China.
