Video: Precious metals risks and opportunities

Potential for a South African miners' strike gives platinum an upside price risk in 2015. For gold, rising interest rates from the Fed give it downside price risk.

Interview Transcript

Near-term precious metals outlook

For precious metals such as platinum and palladium, I see markets basically stabilizing in the near term. So for gold prices, I do see them moving back above 1200 a tri-ounce for 2015 and for platinum I also see markets moving higher. In the case of platinum, I think they move back above 1300 a tri-ounce, and this is related to the supply-side pressures coming out of South Africa. But the bottom line is, for precious metals, I see basically a market that's going to be stabilizing for 2015.

Key precious metals price risks

For 2015 I see two primary risk factors. For platinum, I think South African and miners' willingness to strike once again is going to be strong upside price pressures for platinum markets. In the case of gold, I see rising interest rates coming from the US monetary…from the Federal Reserve being a downside price risk, and this is going to be a headwind to prices in keeping them…and moving either stable or potentially lower for next year.

Buying opportunities for precious metals

Buy platinum now. I think current prices are around 1200 or 1300 a tri-ounce won't last. For 2015 it's going to move higher as South African problems will be an upside price pressure for platinum. For Palladium, I would suggest waiting four to six months. Basically, with rising US interest rates, I think that's going to be forcing US investors out of these markets, and that will be providing a buying opportunity for industrial users of palladium.

K.C. Chang, Senior Economist, Non Ferrous Metals, IHS Pricing & Purchasing Service

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.