Reuters- Precious metals could rally in 2008 as the U.S. dollar falls and supply flattens, JPMorgan said on Friday, ranking the sector the strongest among all commodities for next year.
JPMorgan said its favorite precious metals continued to be gold and platinum, with their respective prices expected to average $815 an ounce and $1,475 an ounce for 2008, with risks strongly skewed to the upside.
The U.S. bank said that precious metals are unlikely to de-link from the dollar next year and it expected a large portion of the volatility in metals prices is likely to come from the currency markets.
“Precious metals have the most scope to rally given their leverage to currency markets and supply constraints. Mining supply growth will likely be flat in gold for the next four years, while platinum and palladium will likely remain in deficit next year,” JPMorgan told clients in a note.