The outlook for precious metals in 2025 looks promising, with analysts from UBS and Bank of America expressing confidence in the performance of gold, silver, and platinum.
Gold remains a standout, with both UBS and Bank of America forecasting higher prices driven by factors like geopolitical uncertainty, central bank purchases, and investor demand.
Silver is set to benefit from strong industrial demand, particularly from the solar and electric vehicle sectors, as well as supply constraints.
Meanwhile, platinum's market is expected to tighten due to supply-side pressures, despite mixed demand, especially in the automotive sector.
Gold
The outlook for gold prices in 2025 remains robust, with analysts from UBS and Bank of America expressing strong confidence in the yellow metal's performance, citing geopolitical tensions, macroeconomic volatility, and strategic investment trends as key drivers.
UBS analysts maintained a bullish stance, anticipating new price highs in 2025. They attributed this optimism to lower US real rates, heightened geopolitical uncertainty, and increased gold allocations by central banks.
While gold’s relationship with real rates has weakened, UBS emphasized that the expectation of lower rates over the next 12 months remains crucial.
They also highlight the role of diversification and safe-haven flows, particularly in an environment of elevated geopolitical risks and macroeconomic volatility.
“There is still ample room for investor gold allocations to rise as diversification and safe haven flows remain key,” analysts wrote.
UBS predicts continued central bank purchases, although at a slower pace, as gold’s role as a stable reserve asset remains essential.
The analysts' top picks for gold in 2025 include Agnico Eagle Mines Ltd (TSX:AEM), Franco-Nevada Corporation (TSX:FNV), Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM), Northern Star Resources Ltd (ASX:NST), and AngloGold Ashanti (ASX:AGG), all of which are well-positioned to benefit from a rising gold price environment due to their strong assets and operational efficiency.
Bank of America analysts, meanwhile, forecast gold prices to average $2,750 per ounce in 2025.
Despite the headwinds of a stronger US dollar and rising rates, they cited global public debt concerns and diversification needs as supportive factors.
The analysts noted that while gold’s rally in 2024 faced some corrections, especially following geopolitical events and US elections, underlying bullish trends persist.
Rising US funding needs and debt servicing costs are expected to enhance gold's appeal as a safe-haven asset, the bank’s analysts believe.
Both UBS and Bank of America underscore the growing role of official sector purchases and investor allocations in driving gold demand.
Central banks continue to view gold as a key diversifier, while investor holdings have room to grow, given historical allocation levels remain below past peaks.
“Gold’s resilience in the face of rising rates reflects the challenging fiscal backdrop in the US, making it an attractive asset for central banks and investors,” Bank of America wrote.
Silver
The silver market is poised for a breakout in 2025, driven by strong demand and supply shortages, as UBS analysts predict silver will outpace gold in the coming year.
The analysts are optimistic about silver’s potential, noting that it stands to benefit from “catch-up trades” as the bullish gold outlook persists.
While geopolitical tensions and growth concerns could present risks, they expect silver to shine in an environment of rising gold prices and Fed policy easing.
They also emphasized that silver's supply-demand fundamentals remain strong, particularly with growing demand from the solar industry, which is the largest source of industrial consumption.
"We continue to see growth in demand from the solar sector, which accounts for the largest category under industrial consumption," UBS wrote.
However, UBS analysts acknowledged that retail investor interest in silver has been lackluster, with silver ETFs seeing gradual inflows and coin sales declining. Still, they remain confident that silver’s relative value to gold and its crucial role in the energy transition will attract more investor interest.
"Silver can attract relative value trades, especially if there are more stimulus announcements in China," they wrote, pointing to the broader economic recovery as a key driver of silver's outperformance.
Bank of America analysts share the positive outlook for silver, emphasizing that the metal’s fundamental strengths are set to support higher prices.
"We don’t expect meaningful supply increases in 2025," they stated, highlighting China’s shift from a net exporter to a net importer, which is tightening global silver supplies.
With strong demand from industries like solar and electric vehicles, Bank of America analysts believe silver is well-positioned for price gains. "The solid fundamental backdrop should also attract more investors, keeping a bid on prices," they added.
They also noted that silver's performance is closely tied to global industrial production, with silver’s price benefiting from an economic recovery in the coming months.
"Once the dust settles, the white metal should outperform because it is key to the energy transition and also sensitive to manufacturing activity," the bank’s analysts concluded, foreseeing strong investor interest in silver as the market responds to growing demand and limited supply.
Platinum
The platinum market is poised for gradual tightening, with UBS analysts predicting that supply-side challenges will drive prices higher over the medium to long term.
While risks remain in both demand and supply, the analysts expect the market will tighten gradually, despite factors such as rising production costs and limited investment in the sector.
“We continue to expect gradual tightening in the market, which should lift platinum prices over the medium to long run," they wrote.
They also highlighted the risks posed by rising production costs and the potential for mine supply to remain flat or even decline, citing "a high risk of supply disappointments" as producers struggle with cost-cutting measures.
With platinum demand, particularly in the automotive sector, facing downside risks, UBS analysts foresee "a 2% year-over-year decline in automotive platinum demand in 2025," although they also pointed to upside potential in the form of stronger demand for hybrids and platinum substitution for palladium.
The analysts expect platinum's market conditions to tighten, driven largely by supply-side factors. "We expect a larger deficit in 2025 than previously thought, and for market shortfalls to ease over the remainder of our forecast period," they stated, underscoring the vulnerability of the market to supply shocks and better-than-expected demand.
Investor interest in platinum has been mixed this year, with ETFs seeing growth but speculative futures positions fluctuating. UBS analysts noted that sentiment is generally more positive toward platinum than palladium, although investors have shown hesitation in committing to platinum.
"Sentiment favours platinum over palladium yet remaining hesitant to put positions on," they explained.
Despite the uncertainty, they expect stronger platinum prices as the market tightens, further supported by growing investor flows in the second half of next year. "We expect a more sustained move in platinum’s favour in the latter half of next year," they added.
Bank of America analysts, meanwhile, suggested that the broader PGM platinum group metals (PGM) market remains under pressure, particularly as electric vehicles continue to gain market share and reduce demand for palladium.
Although platinum faces some exposure to the auto industry, it is less vulnerable than palladium. "Platinum fundamentals look somewhat stronger because the metal is less exposed to the auto industry," the bank’s analysts noted, pointing to a potential import ban on Russian materials as a key risk.
They warned that such a ban could lead to price increases for both palladium and platinum. "A potential import ban on Russian material (e.g. in the US) is a key risk to our bearish view and could see palladium rallying sharply and continuing to trade at a premium to platinum," they wrote.
Despite these concerns, Bank of America analysts remain cautious about palladium, predicting that its surplus will continue unless further production cuts are implemented.
"We continue to see palladium surpluses, so we do not consider the price rebound in autumn 2024 a wholesale reassessment of fundamentals," they said.