The Federal Reserve’s tightening cycle and positive prospects for the U.S. economy should limit gains in the gold and silver markets. That said, gold and silver prices will be highly determined by the level of geopolitical risks. In this regard, tensions in the Korean peninsula and next year’s election cycle in key countries, including Brazil, Egypt and Italy could boost political unrest, thereby pushing demand up for safe-haven assets. While demand for palladium, this year’s best performer among precious metals, should remain strong next year, increased supply could put a cap on price gains. As a result, analysts polled for this month’s survey see base metal prices for Q4 2018 unchanged from the same quarter in 2017.
