(Fox Business) Citi Monday cut its outlook on gold prices for the year ahead, but raised its view on the price prospects of the platinum group metals.
The bank cut its 2013 average gold price forecast by 4% to $1,675 a troy ounce. It raised its 2013 platinum price forecast, meanwhile, by 1.5% to $1,700/oz and its palladium outlook by 4.2% to $775/oz.
Citi expects demand for platinum to outstrip supply by 94,000 ounces in 2013, with the market returning to balance between 2014 and 2017.
A more pronounced deficit is expected for palladium, which should experience a supply shortfall of 336,000 ounces this year, widening to 639,000 ounces in 2014, Citi said.
Platinum and palladium prices have seen a strong start to the year, underpinned by expectations of tight supply of the metals from South Africa this year and improving demand for the metals in the autocatalyst sector. Last week, Anglo American Platinum Ltd. (AMS.JO) announced plans to cut its annual production by 20% to reduce losses from mines that can’t operate profitably in the current market.