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Bhar, RobinCrdit Agricole CIB

Ceh, JrgLandesbank Baden-Wrttemberg

Cooper, SukiBarclays Capital

Dincer, BayramLGT Capital Management

Fertig, PeterQCR Quantitative Commodity Research Ltd

Firman, CarlVM Group

Hochreiter, RenAllan Hochreiter (Pty) Ltd

ansen, MichaelJPMorgan Securities

Jollie, DavidMitsui & Co Precious Metals Inc

Kendall, TomCredit Suisse Securities (Europe) Ltd

Klapwijk, PhilipGFMS

Norman, Ross

Sharps Pixley LtdPanizzutti, FredericMKS Finance SA

Rhodes, JeffreyINTL Commodities

Savant, RohitCPM Group

Smith, DanStandard Chartered Bank

Steel, JamesHSBC

Stevens, GlynINTL Commodities

Takai, BobSumitomo Corp

Tremblay, Anne-LaureBNP Paribas

Tully, EdelUBS

Turner, MatthewMitsubishi Corporation International (Europe) Plc

Vaidya, BhargavaBN Vaidya & Associates

Wilson, DavidSocit Gnrale

Wrzesniok-Rossbach, WolfgangHeraeus Metallhandelsgesellschaft mbH

$1200

$1100

$1300

$1400

$1500

$1600

$1700

$1600

$1500

$1700

$1800

$1900

$2000

$2100

$22001st week Jan 2011

Forecast Avg 2011$25.0

0

$20.0

0

$30.0

0

$35.0

0

$40.0

0

$45.0

0

$50.0

0

$600

$500

$700

$800

$900

$1000

$1100

$1200

Au Ag Pt Pd

$1375

$1457

$29.65

$29.88

$1735

$1813

$768

$815Average

HighLow

Forecast 2011Forecast contributors remain bullishfor both gold and palladium in 2011.Silver and platinum expectations arepositive but more modest.

All forecasters expect gold to hitrecord highs again this year, with apredicted average high of $1,633.Continued macro-economicproblems were the main driverscited for a continued climb in 2011.Political tensions in North Korea andthe middle east combined witheurozone debt issues were alsoindicated as major factors in thecontinuation of the gold bull market.

The average forecast silver pricewas 29.88, only 1% above the pricein the week the forecast was made.While macro-economic fear and

industrial demand will play a role asdrivers of the silver price, mostcontributors forecast that investmentwill be the most influential. The

average predicted range is thebroadest since the start of the survey,so expect a thrilling ride with silverin 2011.

In platinum, contributorspredicted a continued rise in price,with a forecast average of $1,813,4% above the price at the time ofthe forecast. However, there weremore risks cited for platinum thanany other metal. Industrial pricedrivers threaten to outweighcontinued investor interest. Majorfactors are supply problems in SouthAfrica including power and labour

shortages as well as mine supplygenerally. Palladium has been tippedby contributors to be the best-performing precious metal in 2011.

The depletion of Russian stockpilescombined with growing industrialand jewellery demand were themajor factors provided to justify theaverage predicted high of $993.35,

some $225.35 above the first weekof January price.

What will be the main drive forprecious metals this year global

fragility, ETF investment, Russianand South African mine supply, orelectric car demand? To get theviews of the experts, read on.

Metal1st WeekJanuary

2011

Average2011

Forecast

2010Year

Average

Gold $1,375 $1,457 $1,225

Silver $29.65 $29.88 $20.19

Platinum $1,735 $1,813 $1,610

Palladium $768.00 $814.65 $526.38

FORECAST 2011: AN OVERVIEW

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Robin BharCrdit Agricole CIB, London

Range: $1,280 - $1,550Average: $1,445

Gold should remain supported by a

number of persistent uncertainties in 2011.

These uncertainties are interrelated and include

global growth fragility, sovereign indebtednessand government policies to inflate away such

debts through currency debasement. Moreover,

the fact that gold is not a liability of any

government or corporation makes it

increasingly attractive to investors, especially

given that precious metal does not run any risk

of becoming worthless through the default of

the issuer. Equally, gold cannot be easily

debased like currencies by governments.

Behaving less like a metal subject to the laws of

supply and demand, and more like a currency,

gold is increasingly attractive to investors as a

portfolio diversifier. Importantly, this investor

demand is no longer restricted to professional

investors, with a number of products, in

particular physical ETFs, making golds

inclusion in retail portfolios less cumbersome.

Thus, golds role as a portfolio diversifier will

expand considerably in 2011.

Range: $25.00 - $40.00Average: $29.00Recovering industrial demand due to

stronger global economic growth anticipated for2011 should be the key driving factor that willsee silver outperforming gold. Investor appetitethough should still be the key driver of pricestrength, as investors view silver to be in a win-win situation under most scenarios, trackinggold higher on safe-haven flows and also rallyingin line with the rest of the industrial metalscomplex. Portfolio diversification is likely tocontinue to be a theme, with investors addingexposure to silver through the ETFs. Cappingthe upside will be greater supply associated withrestarts at idled base metals operations and dueto higher scrap recovery rates.

Range: $1,550 - $2,150Average: $1,765Platinum is expected to steadily

strengthen during the course of 2011underpinned by robust investment demand reflected in high net long positioning onNYMEX futures and inflows into the ETFs animproving economic outlook and a rebound inauto sales, stimulating autocatalyst offtake, whileusage in other industrial applications shouldrecover sharply. However, there is very limitedmine supply growth on the horizon. Platinumsupply is dominated by South Africa, whereincreasing power costs will require relativelyhigh marginal cost production to be developedto meet demand. Another bullish factor is thehigh frequency of labour unrest in the countryand the potential for production to beinterrupted regularly.

Range: $500 - $1,000Average: $780Increased usage in industrial

applications and greater leverage to reboundingautocatalyst demand, with the emphasis ongasoline-fuelled engines which dominate theUS and Chinese markets will put the spotlighton palladiums increasingly more favourablesupply/demand fundamentals. The launch of asuccessful physically backed palladium ETF inthe US is likely to be a significant factortightening availability in a small and oftenilliquid market. Sales from Russian statestockpiles have kept the palladium market wellsupplied, but the exact level of these remains akey uncertainty. Finally, an attractive pricedifferential to more expensive platinum shouldsee palladium as the best performer in 2011 ofthe four precious metals under consideration.

Jrg CehLandesbank Baden-Wrttemberg (LBBW),Stuttgart

Range: $1,200 - $1,700Average: $1,450My forecast for the average gold price

in 2011 is $1,450 per troy ounce. Assumingthat the eurozone debt crisis could evaporate, ifpoliticians find a sustainable solution for theirfinancial needs, gold will lose a part of its safe-haven appeal. In this case, the price can loseabout $200 fast. I guess the fixings will not fallbelow $1,200, as many investors would like toadd gold to their stocks at a low price like this.If economic or political turmoil will go on, Icurrently cannot imagine a price above $1,700,because scrap gold supply would increase andjewellery demand decrease, with limiting effectson quotes.

Range: $22.00 - $40.00Average: $26.00My silver average price forecast for

2011 is $26, while it must be said that forecastsare very doubtful, as the CFTC has admittedprice manipulations in the past. With a price

correction, the low could be around $22.Industrial consumers would be happy to buy themetal at this price and prevent it from fallingdeeper. The high could be as far as $40. Wehave seen how easily investors can spurn theprice in this relatively small market.

Range: $1,600 - $2,000Average: $1,825Platinum should trade around $1,825

on average, with a high of 2,000 and a low of1,600. The white metal has potential within thenext months as the demand for diesel-poweredcars should increase somewhat in WesternEurope.

Range: $600 - $1,000Average: $725In my opinion, Palladium is far too

expensive. I expect a price drawdown within

the next months that could decrease the price to$600. If there should be news that Russianstockpiles could run out earlier than expected,the quotes can climb as high as $1,000. I expectan average price of $725.

Suki CooperBarclays Capital, New York

Range: $1,300 - $1,620Average: $1,495A clouded macro environment against

a backdrop of low interest rates, growinguncertainty surrounding currency debasementand medium-term inflation fears, as well asgeopolitical tensions, continue to stoke investorsappetite for a portfolio diversifier and a safehaven. We expect investment demand to propelgold prices to fresh record highs this year, whileits fundamentals are unlikely to drag priceslower. Physical demand for gold has softened

but remains healthy for the time of year. Thereis very little selling by central banks; insteadbuying remains notable and interest in physicallybacked exchange traded products (ETPs)continues to grow. We expect mine supply torise modestly, jewellery demand to weaken, butscrap supply to respond to higher prices,resulting in a notional gold surplus, which weexpect to be absorbed by investment demand.When the pace of investment demand slows, wedo not expect a massive outflow, given thelonger-term allocation in the metal; rather, weexpect less committed longs to be flushed out.In that instance, it will be jewellery demand thatprovides the floor and, in light of last yearsactivity and jewellery demand emerging athigher price dips, we would expect it at leastinitially to provide a cushion for prices. In ourview, it will be an improved macro environmentand increased interest rates that will allayinvestors fears and prompt the slowdown indemand.

Range: $18.50 - $36.50Average: $29.10In isolation, silvers fundamentals

remain weak, but accompanied by investment

demand, piggy-backing off gold, the pictureturns positive. Silver was the surpriseoutperformer of 2010 despite its poorunderlying dynamics. But we believe the risksto silvers supply and demand outlook outweighits potential upside drivers. Mine supply hit arecord high in 2004 and has hit successive highsevery year since. Photography demand remainsin structural decline and jewellery consumptionis sensitive to high prices. These key dynamicsled to a bloated surplus in the market. Theupside potential for silver, in our view, rests inthe hands of investors. But could thefundamentals catch up with the positive investordrive? The strength of demand in China has beenimpressive but high silver prices would alsoaffect the feasibility of new technologies thatemploy the metal. We expect industrial demandto grow at its fastest pace since the start of ourdatabase, but even with our optimistic demand

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outlook for next year, mine supply growthwould need to be derailed to provide a reallysupportive base for silver prices; until theninvestor demand will lead the upside and if thatappetite sours, silver will be the precious metallikely to suffer the sharpest correction.

Range: $1,650 - $1,955Average: $1,815The key upside driver for platinum

prices stems from the supply side. With morethan three-quarters of the worlds platinumsupply mined in one country, risks to furthergrowth in output remain concentrated.Producers had indicated prices would need totrade north of $1,500/oz in order to support anincrease in output; however, other factors haveremained in the limelight and could adverselyaffect growth. Structural issues such as lowerhead grades, delays in starting the coal-firedpower stations and cost pressures arising as aresult of the strength of the rand have added to

mining difficulties. But serial challenges such assafety-related stoppages, industrial unrest andEskom increasing its power tariffs still persist,making for a murky supply outlook. Should thecoal supply situation deteriorate further andescalate to the levels suffered three years ago,platinum prices could jump higher. On thedemand side, although palladium can now besubstituted in part for platinum in dieselcatalysts, the bulk of the catalyst remains aplatinum loading, and the recovery of dieselsshare in the key European market, coupled withthe return of fleet buying and theimplementation of tighter emissions legislation,continues to bode well for platinum autodemand. Auto demand coupled with continuedinvestor interest is likely to offset the effect ofhigher prices on jewellery demand and thepotential increase in scrap supply.

Range: $650 - $Average: $820The demand outlook remains

promising for palladium in light of its jewelleryconsumption still being in the early stages of itslife cycle, in-roads in the diesel catalyst marketand the growth of vehicle sales stemming from

gasoline-biased markets such as China and theUS. The key wild card remains state stockreleases from Russia, which have kept themarket on tenterhooks and in a sizeable surplusover the past decade. In fact, without theshipments, the market swings into deficit. Lastyear, fresh ETP inflows almost matchedestimated Russian shipments. In our view, ifRussian shipments are a negative unknown, ETPflows are a positive unknown and have thepotential to make stocks visible. Our marketbalance implies a deficit for the palladiummarket next year, assuming a slowdown inreleases from Russian state stocks, but also aslowdown in ETP demand. We expect prices toclose in on their highs last tested in 2001, aseven though the scales could once again bebalanced between Russian shipments and ETPflows, the palladium market undoubtedly lookstighter.

Bayram DincerLGT Capital Management, Pfffikon

Range: $1,222 - $1,777Average: $1,499This year we will certainly witness the

continuation of the gold bull cycle. Investorshave a wide range of reasons to hold on to andinvest more in gold due to various recentlyexperienced problems. This means the stronginvestment case for gold still applies. Thus, inconsidering these influential factors, as well asan intact and positive fundamental physical goldmarket framework both of which will besustainable price drivers we forecast that thegold price will average $1,499. Because of thevolatile trading environment due to macropush/pull forces and higher future uncertainty,we anticipate that investment demand willelevate gold prices to nominal record highs. Inan upside wave scenario triggered by anexogenous induced macro shock, gold prices are

likely to overshoot the target of $1,777. In arisk scenario, an excessive sell-off could bringprices down to $1,222. However, continuousinvestment and fundamental demand willcushion and support prices throughout the year.In our expected scenario of a second goldendecade beginning in 2010, we expect nochallenges to our belief in the secure currencystatus of physical gold.

Range: $19.99 - $39.99Average: $33.33In 2011, we expect the performance of

silver to outshine that of gold. Industrialdemand and demand from all other categories,except photography, will be an additional price-driving source, and a limited implied marketbalance remains to be absorbed by theinvestment community. All things being equal,and with the same various reasons and concernsof global gold investors, we expect a furthersurge in silver investment demand. This yearsexpected silver outperformance comes mainlyon the back of the positive price developmentand positive investment sentiment for gold. Thispositive spill-over effect, including beta-factorreturns compared to gold returns, will result in

an average silver price of $33.33. Our base casescenario in all precious metals is bullish and wecould temporarily see a high of $39.99.However, a vicious dynamic could evolve if asell-off in silver should materialise and thesupport level of $19.99 could be tested.

Range: $1,555 2,111Average: $1,888In 2011, the forecast is for a well-

balanced market with a marginal surplus. Fromthe demand side, higher demand fromautocatalysts and all other industrial sectors,including the jewellery sector, will be price-supportive. An increase in investment demanddue to its having the lowest simple margin of allprecious metals, and future implied marketbalance deficiency, could drive prices. There iscurrently increased emphasis on, and risk of, asupply constraint scenario, which is not

reflected in prices. In evaluating all factors, weforecast an average price of $1,888. We assign ahigher likelihood of an upside breakout to a highof $2,111, compared to a downside test of thecash-cost supported level and a non-sustainablelow of $1,555.

Range: $555 - $1,111Average: $888The star performer in the precious

metals space in the past year will continue toperform well this year. A strong globalfundamental demand, especially from theautomotive sector, aligned with higherinvestment demand will help prices to average$888. Supply constraint issues from majorproducing countries combined with ongoingspeculation about the low Russian state stocklevels could induce an overreaction, causingprices as high as $1,111. Further state-controlled restrictions in order to limit carregistration beyond the Beijing area could cause

palladium prices to fall to a low of $555. At thislow level, we expect that investment demandwill be attracted to indirectly gain exposure tothe growth of the diverse industrial sectors,including emerging markets automotive sector.Fundamentally speaking, palladiums impliedmarket balance deficiencies for this andupcoming years are very constructive to longpositioning in this semi-precious and semi-industrial metal.

Peter FertigQCR Quantitative Commodity ResearchLtd., Hainburg

Range: $1,300 - $1.550Average: $1,450At the current price level, jewellery

demand is probably again not the major driverof gold. However, bargain hunting by thisindustry could provide support duringcorrections. As in previous years, investorsdemand will play the crucial role for new recordhighs of gold. Inflation is expected to remainwell behaved in Western economies. However,rising food and energy prices are likely to lead

to higher inflation rates in emerging marketsand could lead to rising demand for gold as ahedge, especially in Asia. Last year, a strongerdollar did not lead to falling gold prices.Nevertheless, the US dollar remains the majorfactor moving gold prices. The rotation ofvoting rights will probably lead to moredissenting votes, but the FOMC is expected tocontinue with QE2, which remains negative forthe US dollar and positive for gold. The debtcrisis of eurozone countries could weigh on theeuro, allowing gold to profit from its safe-havenstatus. But as major investors have alreadyincreased their gold exposure significantly, theupside potential appears to be limited.

Range: $27.00 - $35.00Average: $31.10Silver started its rally and

outperformed gold as talk of a new round of

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quantitative easing by the Fed emerged. The USeconomy is likely to expand, but not at a pacesufficient to reduce unemployment considerably.Thus, the Fed is expected to implement QE2 tothe full extent. The S&P 500 index plays animportant role for silver in our valuation models.With the US economy growing and the Fedkeeping interest rates low, the US stock marketshould be positive for silver. A weaker USdollar is another positive factor. A tightermonetary policy in China might be negative forjewellery demand, but should be more thanoffset by demand for hedging against inflation inAsia. Therefore, we expect that silver is goingto outperform gold again in 2011.

Range: $1,675 - $1,875Average: $1,790Austerity measures in many European

economies are likely to have a negative impacton the automotive industry. However, as the USeconomy is likely to expand, albeit at a modest

pace, car sales are likely to increase. Carregistrations in emerging Asian economies werestrong last year and the rise might be slower thisyear. The price of platinum shows a closercorrelation with share prices of automobilecompanies. After the rally last year, thesecompanies might not repeat the performance of2010, which would dampen the pricedevelopment of platinum. However, the USdollar is expected to be a supportive factor.Thus, on balance, platinum should post amodest gain in 2011.

Range: $700 - $850

Average: $790The trend towards stronger use of

palladium in catalytic convertors is expected tocontinue in 2011. However, the measuresintroduced by Chinese authorities to reduce carregistrations in Beijing by 50% this year mightalso be adopted by other metropolitan areas.This would be negative for palladium. Also thedemand from the jewellery industry is likely tobe negatively affected by the rally of palladiumlast year. However, the supply situation mightremain a supportive factor. Thus, palladium isexpected to increase also in 2011, but the

percentage gain might be lower.

Carl FirmanVM Group, London

Range: $1,250 1,605Average: $1,457Just as gold has benefited from wider

macro-economic problems in 2010, so too willthose wider issues determine golds trajectory in2011. Overall, the US will return to slowgrowth around a 1.5% rise in GDP and thiswill help ensure that interest rates barely move,and if at all, only towards the end of the year.But markets overshoot in both directions and itwill take only a little to encourage investors tostart to feel more positive about the USeconomy. Nevertheless, the near-zero interestrate environment will persist in the US and so

too in Europe for much of the year. The rise inthe Chinese and Indian middle class willcontinue to support demand, while politicaluncertainty in the Middle East and North Koreaand potential currency conflicts might lead toprice spikes. There will unsurprisingly alsobe periods where eurozone debts issuesresurface, momentarily increasing golds allureas a hedge against sovereign risk. Offsettingthese supportive factors will primarily be thestronger US dollar, as signs of US economicrecovery become evident. The end to majordehedging by gold miners in Q4 2010 hasremoved a key support, while governmentausterity measures that have been implementedin many developed economies will see goldjewellery demand suppressed. All in all, it willbe a bumpy ride; continued investment demandwill be the critical price support, but as theglobal (and not just the Asian) economy returnsto growth, the necessity to buy gold as an anti-risk device will diminish.

Range: $23.00 - $35.25Average: $29.63The rise in the silver price since

August 2010 has been astonishing, but 2011 isunlikely to see a repetition, yet a spike above$35/oz is possible. Although the range frompeak to trough could be quite wide, the averageprice is unlikely to advance to the same degreeas in the past 12 months. However, where goldgoes silver will surely follow, so the trajectorywill remain up. A key area of support will comefrom industrial demand. Chinas imports ofsilver during 2010 have been very strong andthere is no reason for this to change in 2011.Moreover, as the US economy gathers pace,industrial demand for silver will rise strongly,while new end uses for silver will gain moretraction and begin to eat into the large marketsurplus by year-end. The key issue, as with gold,will be how investors feel about the prospectsfor the US economy investment demand insilver remains crucial.

Range: $1,600 - $1,935Average: $1,785The platinum price is due a rise in

2011, having increased by just 21% in 2010 astark contrast to the 97% climb in the palladiumprice, and 30% and 83% increase in gold andsilver prices, respectively. Platinum jewellerydemand over the past year has been dented bylack of consumer confidence in western marketsand the price has reflected that, along with aslowdown in sales of diesel-engine vehicles diesel prices in the EU have marched ahead ofgasoline, while the new car market in the USremains in the doldrums. As for investmentdemand, that grew strong last year platinumETF holdings grew by 79% in 2010, to 1.2 Moz.Another healthy increase in 2011 will benecessary to propel prices towards 2008 levels;that or a failure in South African supply alwaysa possibility given the structural problems facingthe countrys mines.

In 2010, the palladium price roseastronomically, largely thanks to very stronggrowth in sales of new vehicles in China, Indiaand other parts of the emerging world. Thereappears little reason for this growth to slow in2011, and thus the prospects for the palladiumprice in 2011 are just as compelling. Withautocatalyst demand likely to grow just asstrongly in 2011, a small market deficit willdevelop as supply fails to keep pace. This will becompounded by dwindling sales from Russianstate stockpiles. This continued industrialdemand growth and the uncertainty overRussian stockpile levels will encourage furtherinvestment in palladium ETFs, to the benefit ofthe price. With the absence of any newtechnological breakthrough in autocatalysis tothreaten palladium, the tight market conditionsand the hunt for returns from hard assets arelikely to see the average price outperform

platinum for the third successive year.

Ren HochreiterAllan Hochreiter, Johannesburg

Range: $1,350 - $1,650Average: $1,475

Range: $1,550 - $2,150Average: $1,765Shaky mature economies and concern

about the weak US dollar will see strong goldprices in 2011. Silver will shadow gold prices.

Range: $1,690 - $2,100Average: $1,877

Range: $700 - $1,150Average: $1,070The gathering recovery in world

economies and the strong emerging marketeconomies will see increased demand forplatinum, especially in autocats and industrialapplications in 2011. Persistent failure to reachproduction forecasts from SA producers willfurther support prices. Depleted (finally!)

Russian and Swiss surface stockpiles will likelysee the palladium price reach $1,000/oz atsome stage during 2011.

Michael JansenJPMorgan, London

Range: $1,190 - $1,650Average: $1,463Gold remains a key beneficiary of

global monetary policy settings and associateduncertainty over global asset marketperformance. With economic activity firmingthrough 2011, global monetary policy stances,especially in emerging markets, where inflationhas already taken hold, will encourageindividuals to hold physical metals, and bullionin particular, as stores of value. In addition, theprospect is of significant uncertainty in FX

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Range: $695 - $900Average: $798Pd

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markets, where monetary policy leads toconsiderable downside pressure on the USdollar and/or rising European sovereign stressleads to similar downside pressure on the euro.Bullion the anti-currency stands to gainaccordingly. The main threat to the positiveoutlook is voluntary austerity amongst G3countries.

Range: $24.90 - $38.00Average: $30.50Silvers outperformance vis--vis gold

can expect to continue into 2011 and aparabolic move higher is possible. This reflectsthe significant lack of liquidity in the silvermarket versus gold, especially with respect toscrap and official sector supply. While no singleplayer is dominant in silver (other than ETFs asa group), the broad-based appetite for silver inChina, India and amongst Western investorscould cause a scramble for metal that leads to asharp move higher. Any realignment to gold

and/or industrial metals is a story for 2012 andbeyond.

Range: $1,540 - $2,150Average: $1,875A strengthening South African rand

and rising input costs lead platinum priceshigher in 2011, supported by robust investmentdemand and moderate demand growth intraditional fabrication applications. Supply siderisks, particularly related to SA power supplyand pricing, remain the major upside price riskto platinum, while any significant liquidationfrom the investment community could engineera deeper price retracement. That said, we stillsee the investment climate for platinum robustin 2011. From an S&D perspective, platinum ismore reliant on investment flows than palladium,given the tendency towards a market surplus.

Range: $625 - $1,000Average: $838Palladium remains our favoured pick in

the precious metals space, benefiting from abalance sheet that tends towards a large deficitbefore the involvement of the financialcommunity. As such, the financial sector will

readily absorb any lingering Russian state stocksales, given the broader positive investmentclimate. Prices are expected to average around$840/oz through 2011, with major risks of ablow off top towards the $1,000/oz level.While the investment community is at recordlevels of ownership approaching 4 Moz acrossETFs and futures the underlying investmentcase remains sound, and we expect such flowsto be sticky and continue to remain pricesupportive.

David JollieMitsui & Co, London

Range: $1,310 - $1,610Average: $1,485We believe that the macro-economic

picture will remain positive for gold in 2011.

Real interest rates will remain negative in mostmajor markets, lending strength to the goldprice. Fears of deflation should diminish andinflation will become the focus, supportinginvestment demand for gold. However, weexpect concerns over the health of the eurozoneeconomy and of the euro to allow the US dollarto show some relative strength, suggesting thatthe strong price performance of the second halfof 2010 is unlikely to be repeated. Increasedcentral bank buying should be offset by the endof producer dehedging. A gradual improvementof the global economy and a better performancefrom the equity market may, though, reduceinvestor interest in gold. Overall, we believethat the gold price still has further to run to theupside.

Range: $25.30 40.25Average: $34.05The rapid rise in the silver price to 30-

year highs seems to have been driven by

investors. We expect physical demand to growin 2011, putting in place the foundations forfurther price appreciation. However, to achievethis, investor funds must continue to flow. Coindemand looks set to remain strong, with riskaversion and low interest rates key drivers. ETFinvestment is likely to be weaker than in 2010,given that each investor dollar now purchasesfewer ounces than a year ago, but shouldsupport silver too. We see the competitionbetween gold and silver for investor dollars askey to silvers price performance for the next 12months. We currently expect that a gradualeconomic recovery will help silver outperformgold, with the price ratio moving towards levelslast seen in the 1980s.

Range: $1,630 - $2,050Average: $1,830A strong rand continues to place a cost

floor below the platinum price, limiting thedownside risk over the medium term. However,the outlook for demand is mixed: sales ofplatinum jewellery exhibit some price elasticityand are unlikely to drive higher prices.Automotive sector uptake of platinum shouldclimb but will be constrained by higher purchase

taxes and ongoing austerity measures in Europe.Industrial demand will increase, while priceappreciation in the rest of the precious metalsector should also be supportive. Investors witha multi-year outlook are generally bullish.However, palladium remains the platinum groupmetal of choice for investors in the shorter termand, in the absence of any supply shocks,platinum is likely to underperform palladium in2011.

Range: $700 - $1,000Average: $875The palladium price has found

widespread support from the consensus that ithas moved into deficit after many years of excesssupply. With mine supply likely to rise by alimited amount in 2011 and sales of materialfrom Russian state stocks widely expected to fall,a tighter market can be expected. In our view,

the recent sharp increase in the palladium pricewill not yet have generated significant priceelasticity in most demand sectors (indeed,palladium has benefited from a high gold pricein the electronics sector). As a result, we expectrising global car production to boost palladiumdemand, pushing the market further into deficit,even if ETF buying slows. Investors continue tolook for price appreciation and we expect theirpatience to be rewarded.

Tom KendallCredit Suisse, London

Range: $1,285 - $1,630Average: $1,490Last year, fears of currency

debasement, political upheaval and inflationresulted in substantial flows of money movinginto gold from institutional and private investorsin countries as diverse as the US, Germany,

Switzerland, Thailand and Vietnam. We expectmost of those concerns to persist through 2011.In addition, new investment avenues, increasedmarketing, and ongoing liberalisation of the goldmarket in China are likely to be notable featuresof 2011.

The creeping rise in US interest ratesforecast for the long end of the curve wouldpose a challenge to higher US dollar gold priceswere we in a more normal global environment.However, although we expect the recovery inglobal industrial production and fixed assetinvestment to continue, financial markets arelikely to remain sub-normal for someconsiderable time to come. In addition, nearbyreal rates are expected to remain exceptionallylow or negative. Both factors should continueto feed bullish sentiment in the gold market.

Inflation will also continue to feature high onthe list of gold investors concerns in 2011.When considering how gold might react toinflation, it is important to keep in mind that itis expectations of future inflation and howquickly they change that is of prime importancerather than backward-looking headline rates ofCPI.

The direction of the US dollar against major

currencies, notably the euro, will of course berelevant to the US dollar price of gold. Shouldeuro area stresses subside post April (once majorbond refinancings are out of the way), we wouldexpect the traditional negative correlation toreassert itself and renewed US dollar weaknesswould be expected to contribute to the ongoingbull market in gold.

On the physical side, banks and sovereignwealth funds are expected to be net buyers of asignificant volume of gold in 2011 for the firsttime in many years. Gold has re-establishedstrong credibility as a reserve asset. That, webelieve, is more of a generational shift inthinking than a temporary change.

Strong demand for investment products both exchange traded funds backed by gold andbullion bars and coins is expected to persist inthe western hemisphere and grow robustly inthe large Asian markets of India and China.

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Silver is likely to continue tooutperform gold in 2011, we believe. Silverbenefits from the same investment drivers asgold but also traditionally offers increasedleverage to global financial uncertainty, coupledwith higher volatility both are in part relatedto the relatively small size of the silver market inUS dollar terms. As well as a financial or near-monetary asset, silver of course is also anindustrial metal, with substantial demand fromthe petrochemical, electronics and photographicindustries. This dual role makes it an attractiveproposition for investors during times ofrecovering industrial output and lingeringfinancial instability.

Nevertheless, from a fundamental supply anddemand perspective, we do not foresee anytightness developing in the silver market weexpect rising silver supply from both mineproduction and recycling to be ample to cover

growth in industrial demand. Continuedsupport from investors is a necessity if ourforecast of a substantially higher average price in2011 is to be realised.

Range: $1,645 - $1,945Average: $1,810

Range: $680 - %950Average: $795Although categorised as precious

metals, platinum and palladium remain largelydriven by fundamentals of demand (primarilyfrom the global auto industry) and supply. Thekey sector of consumption for both metals istheir use in catalytic converters to controlvehicle emissions, in which the two metals can,to an extent, be substituted for one another.Hence, the key drivers of demand are vehicleproduction, emissions legislation and theeconomics of switching from platinum topalladium or vice versa. All three factors lookto be aligned to drive very strong growth indemand for palladium in 2011 and a respectablerate of growth for platinum.

The prospects for the global vehicle industryin 2011 are encouraging, we believe. The two

largest light vehicle markets are the US andChina. Recovery of the US market after thecollapse of 2008 has proceeded very smoothly better than many auto analysts had predicted.The Chinese vehicle market is likely to continueto grow at a robust rate, despite the fact thatmost of the incentive measures introduced postthe global financial crisis have now beenwithdrawn. Light vehicle sales in both thesemarkets are dominated by gasoline-poweredmodels, to which palladium has the greaterleverage. Platinum demand will benefit morefrom tighter emissions regulations being phasedin for heavy-duty diesel vehicles (trucks, buses,etc.) and for vehicles used in industry andagriculture.

Platinum and palladium also tick the box forinvestors in being supply constrained. SouthAfrica accounts for around 75% of platinummine production; Russia provides in excess of

45% of the worlds mine supply of palladium.Raising output in both locations is extremelydifficult in the short-to-medium term and, inthe case of South Africa, increasingly costly.Producers margins are also being pressured bythe strength of the rand. Meanwhile, thepalladium market also has to contend with theprospect that Russian sales of metal from stateinventories are at or very close to an end. Thosesales have added a substantial volume ofpalladium to supply over the last few years andtheir absence would contribute to a sizeablesupply/demand deficit in 2011.

Philip KlapwijkGFMS, London

Range: $1,335 - $1,673Average: $1,477Gold will be a beneficiary this year

from investors, and perhaps also some official

buyers, growing concerns regarding the valueof the three major internationally tradedcurrencies. Underlying this is the strongprobability that the sovereign debt crisis willcontinue to rage in Europe and, eventually,spread to Japan and the United States. Althoughincreasing debt monetisation, in at least thelatter two, may buy time and limit the increasein government bond yields, this will be at theexpense of higher long-run inflationexpectations. Moreover, an only sluggisheconomic recovery this year in the industrialisedworld suggests that any increases in short-terminterest rates will be very limited, particularly inthe United States and Japan where, instead,further rounds of quantitative easing are likely.Besides the powerful stimulus the above factorswill give to Western investment, gold shouldalso be supported on price dips by buoyantjewellery and bar hoarding demand from severalkey Asian developing countries and the tendencyfor scrap supply to moderate considerablyduring periods of weaker local bullion prices.

Range: $23.25 - $37.80Average: $30.90Silvers rally since September seems

excessive and it has become expensive relativeto gold, with the metals ratio dropping recentlytowards the 45:1 mark. Thus, although thereought to be considerable investor-driven upsidethis year, there is also scope for a major sell-offand fall in the silver price, even if this shouldprove to be temporary. Furthermore, thesubstantial gains in industrial demand recordedin 2010 are very unlikely to be reproduced thisyear, given a much higher base level. This fact,coupled with little change in other fabricationdemand overall and a decent rise in mineproduction, implies that a considerable market

surplus will have to be absorbed by investors atmuch higher prices than those ruling last year.However, due to the favourable economicbackdrop expected for investment in preciousmetals and a fair wind from gold, we believethat overall net investment demand on this scaleis perfectly feasible. As such, silver prices are

expected to show substantial year-on-year gainsin 2011, even if the intra-year result will fallwell short of 2010s spectacular increase.

Range: $1,590 - $2,012Average: $1,797GFMS currently is projecting a gross

market surplus of close to 800,000 ounces forplatinum in 2011. This is the product ofincreases in supply from mine production andscrap matching gains in fabrication demand,much of which is expected to come from a fairbut far from spectacular recovery in autocatalystand jewellery offtake. Looked at in isolation,the surplus might be expected to put downwardpressure on prices or, at the least, limit anyupside gains. But this would be tounderestimate the ability of investors to driveprices higher in spite of what we believe arerather lacklustre fundamentals. Indeed, lessthan $1.5 billion of net inflows into the metalwould be required this year for investment

demand to absorb the aforementioned grosssurplus, a task that seems quite feasible giventhe favourable economic and financial backdrop,and expected gains in gold. In addition,investors will be encouraged by the fact thathigh mining costs and potential disruption toSouth African production means that the pricefloor will continue to be well supported.

Range: $608 - $1,090Average: $852Of the four major precious metals

markets, palladium is the only one that is in afundamental deficit. Indeed, in 2011, the grossdeficit between supply from mine productionplus scrap and fabrication demand shouldcomfortably exceed 500,000 ounces. Moreover,we expect investors to remain substantial netbuyers of the metal via ETFs and otherinstruments. As such, there ought to beconsiderable upside pressure on the price. Themain limiting factor is expected to be furtherRussian state sales, although there areindications that these are in their sunset years.Headwinds may also come from the growingrisk that gains in autocatalyst demand this yearcould be less than expected if expansion in the

Chinese car market is restrained by acombination of policy initiatives and slowerGDP growth. And, finally, given the scale andrapidity of its r ise in recent months, palladium isvulnerable in the near term to a majorcorrection if speculative longs cut their positions.Nevertheless, focusing on the 12-month outlook,it would not surprise us if a fundamentally tightmarket coupled with robust investment demandresults in the previous all-time high beingmatched during the course of this year.

Ross NormanSharps Pixley Ltd, London

Range: $1,350 - $1,850Average: $1,513After 10 successive years of price

strength during which gold has risen fivefold, it

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Range: $23.15 - $35.80Average: $30.10Ag

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is tempting to ask if prices are now peaking we think not and fresh all-time highs of $1,850are in prospect. The list of those on the buy sideremains as long as your arm, while on the sellside there are relatively few: the scales continueto tip in favour of the bulls.

With the economic crisis morphing into asocial one as unemployment rises and workerstake wage cuts, coupled with rising real rates ofinflation (particularly in Asia), this could promptsignificant increases in retail gold purchasesfrom the general public in both Asia as well asthe West.

With such an entrenched trend line to drawon, the adage the trend is your friend seems aslikely to hold true; to that end a 20-somethingpercent increase looks likely for the year, andthe gold chart should maintain a steady 45-degree climb after a period of consolidationduring Q1. For followers of cycles, 2011 lookslike the year that the Kondratieff Winter beginsto bite a period normally associated with debt

repudiation, trade wars and firm commodityprices. It may put Europe into hibernation, butthe smart money will have a protective coat.

Range: $28.50 - $44.00Average: $37.00After an 80% rally in 2010, it might

seem churlish to expect much more in 2011 forsilver. Early 2011 profit-taking has seen silverdecline more than most, underlining the strongspeculative element in the recent price run, andthis also confers some weakness to its case.However, the investment community has takensilver to it heart and contrary to its modestlyattractive fundamentals, the market prices arelikely to overperform again.

Unlike in 2010, we expect silvers priceaction to conform more closely to that of gold that is to say firmer but a little more rational.

Range: $1,710 - $2,175Average: $1,887It would be tempting to downplay the

outlook for platinum based upon the weakdemand for a range of consumer and industrialproducts in the West. This would be a mistake.Asian industrial production continues to grow

very rapidly, with significant plant openingscovering a wide range of applications such asauto, refining, chemical, electronics and glass(all of which use PGMs), while factory capacityis closing in the West; on balance, we should seea net gain in platinum demand. Car sales in theWest in particular are posting a reasonablerecovery and this may well give moreconfidence to major Western auto-makers tofurther stock-build in 2011, thereby keeping afirm edge to platinum prices. The icing on thecake is likely to be increased investor demandfor platinum as investor awareness of the metalcontinues to grow and the smart money seeksan alternative to gold.

Range: $740 - $1,250Average: $952Having risen 120% and 96% in

successive years, it begs the question whether

palladium must surely now have peaked. Wethink not. With over 150 car makers in Chinaalone (predominantly petrol-engined), theregion is drawing in ever larger amounts of themetal at a time when strategic reserves fromRussia are nearing exhaustion.

To some extent, palladium has played catch-up with its better-looking and rather morepopular sister metal, platinum. However, likeCinderella, palladium now has an invitation tothe ball and investors are increasingly taking ashine to it, much as they have to the rare earthor strategic metals. We predict that increasingindustrial and investment demand will continueto outpace metal supply from mines plusreserve stocks and that 2011 promises to be astrong one for palladium once again.

Frederic PanizzuttiMKS Finance SA, Geneva

Range: $1,320 - $1,780Average: $1,502By the end of 2010, gold closed

around 26.70% higher than the previous year.As gold gained around 29% in 2009, itsperformance over the last two years exceeded50%! We are confident that 2011 shall beanother glorious year for gold and for preciousmetals in general. Most of the factors that ledthe gold price higher over the last two years,such as the global crisis, a weak US dollar, lessscrap supply, official sector buying andgeopolitical tensions in specific regions, just toname a few, shall continue to prevail in 2011.Another significant development is the recentdeterioration of debt quality in several EU statesand other parts of the world, resulting indowngrades by the main rating agencies. Allthese factors leave global markets investors,aiming to keep credit risk as low as possible,with few alternatives to allocate their assets.Physical gold is poised to remain the answer forthe coming year. While we expect the demandfor physical gold to strengthen over the comingmonths on the back of investors and officialsector buying, the supply of scrap should remainin a more reasonable range. The rush for

physical gold and the expectation for its price torise further is discouraging gold holders to selltheir physical assets. We expect another bullrun and a new all-time high to be reached in2011. It will be another volatile year, anddouble-digit rallies seem to remain ahead of us.

Range: $24.00 - $46.00Average: $36.25Silver surprised many and finished the

year 78% higher. We expect silver to remain infocus, as it shall increasingly gain considerationas an alternative to gold in investors portfolios.Increased physical buying interest and a widercommunity of buyers across the globe shall leadsilver to reach new highs. We would not besurprised if silver peaked somewhere between$45-$50/ounce in 2011. This shall not happenwithout high levels of volatility and several sharpdownside corrections.

With an overall annual performance of+15.70%, platinum ranks fourth amongst theprecious metals. While we remain confidentabout the platinum bull trend, we expect theupside performance in 2011 to remain in thesame range as the previous year. We forecast theyear high at around $2,000/ounce in 2011. Theindustrial demand might recover in the courseof the year and provide some support, but amore significant factor will remain the ETF-driven buying as a result of precious metalsportfolio diversification by investors.

Range: $700 - $1,100Average: $915For a second year in a row, palladium

outperformed the other metals by rising another88.30%. Possible supply disruptions fromRussia, and more marginally from South Africa,and lower than expected available stockpiles are

likely to drive palladium higher in 2011.Speculative buying on the back of fundamentalfactors throughout the year shall lead to asustained upside trend. Palladium ETFs are setto further disrupt the fragile supply/demandequilibrium. We would not be surprised ifpalladium gained another 35-40% in 2011. Anychanges in supply figures would have animmediate impact on the price.

Jeffrey RhodesINTL Commodities, COUNTRY

Range: $1,150 - $1,650Average: $1,451

Range: $17.00- $50.00Average: $25.50All of the factors that have driven gold

to an all-time high in 2010, and silver to its bestprice since 1980 and the days of the Hunt Silvercorner, remain in place as we head into 2011.Certainly, despite the fact that there have beensigns of better economic data coming out of theUS, the prevailing view is that the US economyremains vulnerable on the downside, which is

evidenced by the Feds easy money approach,with Bernanke signalling that if QE2 doesntsucceed in producing a sustainable recovery inthe US economy, the Fed would not shrink fromfurther stimulus packages in an effort to protectthe US from the potential ravages of deflation.This does not promote a sense of confidencewith investors, and until and unless the USeconomy makes a clear turn for the better, bothgold and silver will remain the beneficiaries ofsafe-haven flows. Making the outlook for 2011even more uncertain are the woes in Europe,with the very existence of the euro as a majorcurrency brought into question by the sovereigndebt issues faced from the fringe eurozonecountries, and this will continue to be verysupportive for gold and silver prices next year.Although the economic outlook in thedeveloped world remains a serious concern, theopposite is true in the emerging economies of

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Name High Low AverageBhar, Robin 1,550 1,280 1,445Ceh, Jrg 1,700 1,200 1,450Cooper, Suki 1,620 1,300 1,495Dincer, Bayram 1,777 1,222 1,499

Fertig, Peter 1,550 1,300 1,450Firman, Carl 1,605 1,250 1,457Hochreiter, Ren 1,650 1,350 1,475

Jansen, Michael 1,650 1,190 1,463 Jollie, David 1,610 1,310 1,485Kendall, Tom 1,630 1,285 1,490Klapwijk, Philip 1,673 1,335 1,477Norman, Ross 1,850 1,350 1,513Panizzutti, Frederic 1,780 1,320 1,502Rhodes, Jeffrey 1,650 1,150 1,451Savant, Rohit 1,550 1,280 1,370Smith, Dan 1,550 1,250 1,400Steel, James 1,550 1,200 1,450Takai, Bob 1,590 1,240 1,390Tremblay, Anne-Laure 1,650 1,330 1,500Tully, Edel 1,700 1,250 1,550Turner, Matthew 1,653 1,270 1,465

Vaidya, Bhargava 1,550 1,250 1,375 Wilson, David 1,550 1,320 1,485 W rze sniok-Ros sbach, W olfgang 1,550 1,190 1,325

AVERAGES: 1,632.83 1,267.58 1,456.75

1st week Jan 2011

Forecast Avg 2011

AverageHighLow

$1,475.00 $1,456.75

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00

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00

1,4

00

1,5

00

1,6

00

1,7

00

1,8

00

Name High Low AverageBhar, Robin 40.00 25.00 29.00Ceh, Jrg 40.00 22.00 26.00Cooper, Suki 36.50 18.50 29.10Dincer, Bayram 39.99 19.99 33.33Fertig, Peter 35.00 27.00 31.10Firman, Carl 35.25 23.00 29.63Hochreiter, Ren 45.00 32.00 37.00

Jansen, Michael 38.00 24.90 30.50

Jollie, David 40.25 25.30 34.05Kendall, Tom 35.80 23.15 30.10Klapwijk, Philip 37.80 23.25 30.90Norman, Ross 44.00 28.50 37.00Panizzutti, Frederic 46.00 24.00 36.25Rhodes, Jeffrey 50.00 17.00 25.50Savant, Rohit 35.00 18.00 24.00Smith, Dan 30.00 22.00 26.00Steel, James 33.00 22.00 26.00Takai, Bob 38.00 23.00 30.00Tremblay, Anne-Laure 36.00 26.50 30.60Tully, Edel 39.00 24.25 33.00Turner, Matthew 39.00 21.00 30.00

Vaidya, Bhargava 42.00 19.00 27.50 Wilson, David 33.00 25.00 29.50 W rzes niok-Ross bach, W olfgang 32.00 16.00 21.00

AVERAGES: 38.36 22.93 29.88

1st week Jan 2011

Forecast Avg 2011

AverageHighLow $29.65

$29.88

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00

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00

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00

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00

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Name High Lo w AverageBhar, Robin 1,000.00 500.00 780.00Ceh, Jrg 1,000.00 600.00 725.00Coope r, Suki 940.00 650.00 820.00Dincer, Bayram 1,111.00 555.00 888.00Fertig, Peter 850.00 700.00 790.00Firman, Carl 900.00 695.00 798.00Hochreiter, Ren 1,150.00 700.00 1,070.00

Jansen, Michae l 1,000.00 625.00 838.00Jollie, David 1,000.00 700.00 875.00Kendall, Tom 950.00 680.00 795.00Klapwijk, Philip 1,090.00 608.00 852.00Norman, Ross 1,250.00 740.00 952.00Panizzutti, Frederic 1,100.00 700.00 915.00Savant, Rohit 950.00 550.00 730.00Smith, Dan 800.00 550.00 650.00Steel,James 850.00 600.00 750.00Stevens, Glyn 1,111.00 589.00 869.00Takai, Bob 1,150.00 600.00 800.00Tremblay, Anne-Laure 1,000.00 700.00 825.00Tully, Edel 1 ,000.00 650.00 800.00

Turner, Matthew 945.00 625.00 785.00Wilson, David 850.00 650.00 755.00Wrzesniok-Rossbach, Wolfgang 850.00 550.00 675 .00

AVERAGES: 993.35 631.17 814.65

1st week Jan 2011

Forecast Avg 2011

AverageHighLow $768.00

$814.65

500

600

700

900

1,

000

1,1

00

1,2

00

800

Name High Low AverageBhar, Robin 2,150 1,550 1,765Ceh, Jrg 2,000 1,600 1,825Coope r, Suki 1,955 1,650 1,815Dincer, Bayram 2,111 1,555 1,888

Fertig, Peter 1,875 1,675 1,790Firman, Carl 1,935 1,600 1,785Hochreiter, Ren 2,100 1,690 1,877

Jansen, Michael 2,150 1,540 1,875Jollie, David 2,050 1,630 1,830Kendall, Tom 1,965 1,645 1,810Klapwijk, Philip 2,012 1,590 1,797Norman, Ross 2,175 1,710 1,887Panizzutti, Frederic 2,000 1,650 1,855Savant, Rohit 1,900 1,550 1,715Smith, Dan 2,100 1,650 1,850Steel, James 1,900 1,500 1,750

Stevens, Glyn 2,222 1,536 1,969Takai, Bob 1,900 1,560 1,750Tremblay, Anne-Laure 2,000 1,625 1,800Tully, Edel 2,100 1,625 1,905Turner, Matthew 1,990 1,570 1,775

Wilson, David 1,900 1,600 1,780Wrzesniok-Rossbach, Wolfgang 1,850 1,450 1,600

AVERAGES: 2,014.78 1,597.87 1,812.74

1st weekJan 2011

Forecast Avg 2011

AverageHighLow $1,735.00

$1,812.74

1,

500

1,6

00

1,7

00

1,

900

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000

2,1

00

2,

200

1,

800

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China and India, with the worlds two mostpopulous nations posting strong economicgrowth and indeed raising the spectre ofinflation as opposed to the fears of inflation inthe developed world. Given the fact that Indiaand China are the two top gold-consumingnations in the world, with the people having anunshakeable and traditional belief in gold as astore of value, growing disposable incomes pointto the likelihood of strong physical andinvestment demand for gold and silver in 2011.These factors combine to suggest that the bullmarket in gold that started in the summer of2001 shows no sign of ending in 2011, and theonly real question is just how high can the goldand silver prices go? In the absence of any realhelp from the charts with gold at levels neverseen before in history, a reasonable approach isto forecast gold to maintain its average annualgrowth pattern seen over the last nine years of18.52% per annum, which would suggesttherefore an average gold price in 2011 of

$1,451. With the yellow metal in unchartedterritory, it is likely to meet some clear airturbulence with prices in 2011 likely to bevolatile and so we see a potential trading rangeof $1,150 to $1,650. We always say that if youlike gold, then you should invest in silver withits high inherent volatility; so if gold does pushever higher, silver has the potential to test its all-time high price of $50 in 2011, although as in1980, the look at this price could be brief. Onthe downside, silver could test $17 if theuptrend line at $27 and key support at $20 arepenetrated, and so we see a possible range of$17 to $50 in 2011, with an average price of$25.50.

Rohit SavantCPM Group, London

Range: $1,280 - $1,550Average: $1,370Gold prices are forecast to continue

setting records during the first half of 2011.Investors are expected to remain concernedregarding the global economic and politicaloutlook, which should keep them interested in

gold. Currency market volatility, driven partlyby the various monetary and fiscal measuresadopted by central banks and governments toboost economic growth, is expected to drivemarket participants towards gold as analternative asset to currencies and a store ofvalue. Additionally, demand for gold from Indiaand China is expected to remain strong in 2011,as consumers become accustomed to the highprice of the metal. Prices could soften duringthe second half of 2011, based on someimprovement in investor sentiment towards theglobal economic picture and in anticipation ofan increase in interest rates in the United Statesand Europe sometime in 2012. That said, pricesare expected to remain at historically high levelsduring the second half of 2011. Gold priceswill remain at high levels as the world continuesto struggle to correct the large economicproblems resulting from decades of lax fiscal

and monetary policies in developed countries,prior to and post the Great Recession.

Range: $18.00- $35.00Average: $24.00Strong fabrication demand and investor

interest in silver are expected to continuepushing the metals price higher in 2011. Likegold, silver also is viewed as a safe-haven asset.For this reason, the same political and economicconcerns that are expected to drive gold priceshigher are expected to be supportive of silverprices. Silver also has strong fabrication demandfundamentals, with the metal being usedextensively in electronics and in solar panels.The electronics industry has been growing at ahealthy rate, due in large part to the increase indemand from large developing economies. Partof this reflects the shift in manufacturing localefor electronics components to these countriesfrom the rest of the world. Silver prices arelikely to soften during the second half of the

year, as sustained high prices would begin toadversely affect fabrication demand and increaseprimary and secondary supply of the metal.That said, healthy investment demand in themetal is expected to keep the price of silver athistorically high levels.

Range: $1,550 - $1,900Average: $1,715Platinum prices may trend higher

during the first few months of 2011. Platinumfabrication demand is expected to rise for thefull year. Europes auto market, which is thelargest user of platinum, is set to grow slightly.Many auto incentive programmes in Europeancountries have expired, which has been positivefor platinum fabrication demand. Theseincentive programmes favoured mostly gasolinevehicles. A shift back towards diesel cars inEurope should boost platinum demand in 2011.Although platinum mine supply is forecast torise this year, the potential for supplydisruptions should support prices. Safetyproblems and rising mining costs in South Africalikely will not subside. Investors are expectedto continue to view platinum as an attractiveinvestment, both for its industrial qualities as

well as its role as an alternative investment. Thegrowing number and rising scope of platinum-backed exchange traded funds may attract newinvestors. Investment demand is expected to bea primary driver of higher prices.

Range: $550 - $950Average: $730Palladium is forecast to trade higher in

2011, most notably during the first half of theyear. Positive expectations for economic growthworldwide will support higher prices.Palladium is primarily an industrial metal;therefore, healthy economic growth in 2011would be positive for palladium fabricationdemand. Strong fabrication demand fromdeveloping economies in particular will helppush prices higher. Demand for palladium fromboth the auto and electronics sectors set to risesharply in 2011. A rise in annual new mine

supply in 2011 could weigh on prices, butgrowth in supply is not expected to outpacedemand. Additionally, ongoing supply problemsshould prevent prices from dropping below$550. Palladiums robust fundamentals willcontinue to attract investors, which will help topush prices higher. Investment demand isexpected to play a larger role in palladium pricemovements going forward.

Dan SmithStandard Chartered Bank, London

Range: $1,250 - $1,550Average: $1,400Gold prices have rallied strongly

through most of 2010, but the upwardmomentum started to slow heading into year-end. This is not surprising, as the fundamentalshave become mixed. Investor inflows into ETFswere strong through May and June, but have

flatlined more recently, with the major ETFsnow holding 67 Moz of gold. Gold coin saleshave also fallen back. Finally, producer de-hedging (previously a significant source ofdemand) is now close to exhaustion, with mostmajor producers having bought back forwardsales.

More bullish has been continued strongdemand from India. Local traders report thatdemand has been robust through the Indianwedding season, and the Bombay BullionAssociation estimates imports at 43 tonnes (t) inOctober up 19% year-on-year. The officialsector is also a net buyer at present. There havebeen significant sales by the IMF, which reached32t in September. However, central banks werenet buyers of 23t per month from May toAugust, which helped to offset this. 2011outlook: we still expect gold to trend higher inthe year ahead, despite the high starting base forprices. We expect US interest rates to remainlow, worries about the uncertain impact ofquantitative easing to remain high and investorappetite for gold should stay strong. However,the market will face significant headwinds andwe see the upside for gold as limited. Webelieve the US dollar will strengthen through

most of next year and the expected recovery inthe global economy will moderate safe-havenbuying.

Range: $22.00 - $30.00Average: $26.00Silver has been a strong performer in

the metals complex in recent months, benefitingboth from its precious metals status, as well asits importance in industrial use. Sales of coinsby the US Mint have accelerated in recent yearsand remain at very high levels in contrast withgold. In late August, silver was cheap on a ratiobasis, although it now looks as if it has overshotfair value. The average gold-silver ratio over thepast 30 years was 64; it is now 53 (a low ratioshows that silver is expensive), suggesting thatthe best of the rally is over. Also, investorinflows into ETFs have been stronger than forgold in recent months. An additional bullish

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factor has been strong industrial demand fromChina, which has meant that the country hasboosted imports. 2011 outlook: silver hasoutperformed gold recently, but we feel thatthere is now too much speculative froth in themarket and it is overdue a correction. As aresult, we think silver prices will pull back inthe months ahead, especially if the US dollarstrengthens, as we expect. However, theunderlying fundamentals are still good and weexpect silver prices to benefit from rising goldprices in the year ahead; and industrial demandin China should remain supportive for most of2011.

Range: $1,650 - $2,100Average: $1,850

Range: $550 - $800Average: $650In the past few months, there has been

clear differentiation in the platinum group

metals (PGMs), with palladium prices breakingdecisively higher and hitting record highs above$700/oz. Platinum has also rallied, but theincrease in prices since the end of August hasbeen roughly half that of palladium. Palladiumsfundamentals still look stronger than platinums.Recent months have seen Chinas auto sectorand economy regaining strength, which tends tofavour palladium, due to large numbers ofgasoline cars in the country. Latest figures forChinas car sales showed growth accelerating to27% year-on-year in October, while themanufacturing purchasing managers index roseonce more in October. Investors also favourpalladium over its sister metal through physicalETFs. The group of major palladium ETFsincreased by 8% from the end of August to 1.89Moz in early November, while platinum rose bya more modest 3% to 1.04 Moz.

Recent results from PGM producers indicaterising supply in response to the recent upturn inprices. Anglo Platinum reported a 20% year-on-year rise in palladium output in Q3, whileplatinum was up 11% year-on-year. Norilsk the dominant palladium producer announcedan 8% year-on-year rise in palladium output inthe first nine months of 2010, while platinum

was up 9% in the same period.We believe there is more upside for platinum

prices in the year ahead, but the uptrend isunlikely to be smooth. Investors remain fickle,selling through the ETF when risk appetite fades,and the recent strong ramp-up in supply atmajor producers is a worrying sign for bulls.Chinas imports also fell in August, suggestingwaning appetite from the jewellery sector.Support for prices should come from risingoperating costs in South Africa; and an expectedupturn in European auto sector demand offersadditional potential support.

We still believe that palladium is likely tooutperform platinum in the year ahead, althoughafter the recent sharp rise in the former, wethink the potential for outperformance bypalladium is now far more limited than it was.A strong auto sector in China and the US shouldkeep prices on an upward track, but additional

sales of material from Russian stockpilesrepresent the main downside threat to prices.

James SteelHSBC, New York

Range: $1,200 - $1,550Average: $1,450A combination of safe-haven buying

stemming from ongoing European Union debtconcerns and continued quantitative easing inthe US as the Federal Reserve struggles toprevent deflation from taking root will supportthe gold market in 2011. This should becomplemented by growing inflationary concernsin the emerging world based on quickeningeconomic activity and strong global commodityprices. Other supportive factors include likelynet bullion purchases by the official sector forthe first time in decades, as potential sellersunder the central bank gold agreement retreat

from the market, the International MonetaryFund sales programme winds down and someAsian central banks seek gold to diversify theirforeign exchange holdings. High prices willlimit jewellery and coin sales as well as stimulatescrap supplies. This should help constrain priceadvances.

Range: $22.00 - $33.00Average: $26.00Although we expect silver to remain a

beneficiary of safe-haven investor buying andstrong industrial demand, notably from theelectronics sector, prices may ease from currenthigh levels. Prices far above the marginal costsof production are encouraging primary mineoutput, while silver by-product is increasingwith greater base metals production. Afterperforming well for much of 2010, retail coindemand is slowing, and we expect ETF demandto flatten out this year. High prices should alsoencourage an increase in recyclable material,which may be substantial.

Range: $1,500 - $1,900Average: $1,750Limited mine supply increases based

on technical obstacles facing producers in SouthAfrica and high production costs will supportplatinum prices as will a continued recovery inglobal auto production. Furthermore investorsmay diversify precious metals holdings into thePGMs and, consequently, we expect ETFdemand to be strong this year. Other forms ofindustrial demand are likely to be firm in linewith robust global industrial production. Highprices may deter jewellery demand, however,which would free up supplies for the industrialsector and limit price gains.

Range: $600 - $850

Average: $750Palladium prices should be supported

by ongoing concerns over the remaining level ofRussian state stockpiles. Lower stockpile saleswould support palladium prices. The continuedrecovery in world auto production favours

palladium. This is because much of the growthin world auto production this year will comefrom China, other parts of the emerging worldand the US, where palladium-rich gasoline-firedvehicles are preferred. Like platinum, palladiummine supply growth will be limited, asproducers face a range of obstacles, includingpower and water constraints. High prices arelikely to deter jewellery and other forms ofdiscretionary demand, helping to cap price gains.

Glyn StevensINTL Commodities

Range: $1,536 - $2,222Average: $1,969PGMs are increasingly becoming

investment mediums and the industrial influenceon price is declining. Hence, any continuingWestern world economic weakness in 2011 isunlikely to have the effect it would have had in

previous years. Platinum was the laggardamongst the precious metals in 2010 and hassome catching up to do as investors seekalternative safe havens for their money.

Range: $589 - $1,111Average: $869The weight of speculative involvement

in palladium looks set to be the majordeterminant of price movement in 2011.However, there will also be one factor stronglyin palladiums favour in the industrial sphere the shift from west to east in the balance ofpower in terms of car sales. The prominence ofsmaller, petrol-engined vehicles in the emergingeconomies certainly gives palladium an edge.

Bob TakaiSumitomo Corp, Tokyo

Range: $1,240 - $1,590Average: $1,390

Range: $23.00 - $38.00Average: $30.00

Range: $1,560 - $1,900Average: $1,750Range: $600 - $1,150Average: $800I believe the Fed will keep its

accommodative monetary policy until the jobmarket begins to show signs of recovery, which Idont think is likely this year. Hence, the dollarwill stay under pressure and this weak dollarwill underpin equities and commoditiesthroughout the year.

Investment money will keep flooding intothe commodities space, and the precious metalswill continue to be favoured by refugees fromdollars and the euro. Of the four metals, I likepalladium the most because of its strongfundamentals, and I think it has a good chance oftesting the historical high of a decade ago.

In a generally sanguine scenario for 2011,

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however, one should be alert to two potentialrisks: unexpected troubles in the Chineseeconomy or a significant increase in US long-term interest rates.

The US has a growing deficit, and it seems asif there is little or no political will to addressthis; indeed, the political situation in Washingtonis becoming more and more partisan. There is alurking danger that the bond markets couldreact negatively to this situation. Either of theseevents could trigger a sell-off in all correlatedasset classes, including equities and, particularly,commodities.

Anne-Laure TremblayBNP Paribas, London

Range: $1,330 - $1,650Average: $1,500A number of factors will continue to

underpin golds rally, including ample liquidity

and low official interest rates in developedeconomies, inflationary pressures in China,concerns related to the stability of eurozoneperipheral countries and increasing uncertaintyregarding the role of the US dollar within theinternational monetary system. In addition, theofficial sector should continue to be an activebuyer of gold in 2011. The strengthening of theUS dollar until Q3 2011 will likely moderatethe extent of the price rally, despite thedeclining correlation between gold and theeuro/US dollar.

Range: $26.50 - $36.00

Average: $30.60Silver should continue to ride on golds

coattails, benefiting from its status as a cheaperalternative to the yellow metal. In particular,investment demand is likely to remain solid.However, industrial demand growth may slowand we forecast that the silver market willremain in underlying surplus. We expect thegold/silver ratio to rise in 2011 from its currentlow level of less than 50.

Range: $1,625 - $2,000 Average: $1,800

The surplus in the platinum marketlimited the upside in the price in 2010compared to the performances of the otherprecious metals and is likely to do so again in2011. This is despite a struggling mining sector,notably in South Africa and Zimbabwe, whichfailed to materially increase production in 2010.On the demand side, autocatalyst demandgrowth should slow, as should growth inindustrial consumption, while jewellery demandwill likely rebound from its 2010 level.

Range: $700 - $1,000Average: $825Palladium will likely again be the best

performer of the precious metals complex in2011. The market deficit should increase againthis year, as moderate growth in supply may notmatch strong growth in demand, particularly inthe autocatalyst and industrial sectors.

Mounting indications that the Russian statestockpile may be nearly exhausted should addfurther momentum to the price.

Edel TullyUBS, London

Range: $1,250 - $1,700

Average: $1,550European debt concerns, QE

implications and an ongoing safety drive willfuel continued investor demand for gold. Fromthe 2010 record price of $1,431, we are lookingfor a 20% appreciation in 2011. There are risksahead though: a modest but sustainableeconomic recovery is underway, investors arereturning to equities, and bond yields are rising.Its too early for these negative risk factors toencourage liquidation. The opportunity cost ofholding gold remains attractive, and for 2011 atleast, the US will not return to monetary policy

normalisation. Faith in fiat currencies remainsshaky. Gold is the only currency without debtand without any likelihood of QE. A strongerdollar in the context of a European debt crisis isnot automatically a burden for gold. Jewellerydemand remains quite decent, with scrap supplycontained. We expect no change in the officialsector attitude to gold. While the year will notbe without volatility, dips should be wellsupported.

Range: $24.25- $39.00Average: $33.00Silver benefited impressively as a

cheaper alternative to gold in 2010. But this isonly one part of the silver story. Typically, wevery rarely talk about the metals fundamentalsimpacting price direction, and instead point toinvestor and speculator activity as the primarydriver. But silvers fundamentals have tightenedbecause industrial demand has improved by asubstantial margin. Additionally, demand fromthe retail sector has contributed to a contractionin the 2010 silver surplus. Once again, weexpect silver to outpace gold over the monthsahead, but that direction will be fraught withhigh volatility. Silver is not an investment for

the faint-hearted and we foresee silver servingup episodes of deep price retracements in 2011.

Range: $1,625 - $2,100Average: $1,905We expect platinum will play catch-up

in 2011. While palladium continues to tell abetter auto demand story, in platinums favour,European fleet sales are rising, consumers areincreasingly returning to diesel vehicles, credit ismore becoming more easy to access, plus heavy-duty diesel sales and production are r ising acrossmature markets. Mine supply interruptionscould push platinum to trade at $2,100 nextyear. The strength of the rand, coupled withaccelerating mine cost inflation means thatproducers are not fully benefiting from therecent surge in US dollar platinum. We forecastlimited mine supply growth, continuingindustrial demand appreciation but an

acceleration in recycling both autocatalyst andjewellery. While platinum fundamentals are in amuch better state than 2008, at times, tacticalrisks will be high because of obese positioning,but structurally platinum remains a buy for2011.

Range: $650- $1,000Average: $800For palladium, an extension to $1,000

is quite possible so long as the investor loveaffair remains in place. While the metalsmedium-term direction is fundamentallygrounded, short-term momentum remains inthe hands of investors and speculators. Potentialsupply constraints have been compelling reasonsto own both platinum and palladium; we expectRussian state sales to be constrained relative to2010. Auto recycling will increase, however,thus reducing the overall market deficit. Whilefundamentals are very decent, the depth ofinvestor activity will serve up very volatile price

action. But as the May 2010 sell-off was brief,we expect supportive end-user and investorbuying will ensure that dips will be short-livedand opportune buying occasions.

Matthew TurnerMitsubishi, London

Range: $1,270 - $1,653Average: $1,465

Gold option prices imply this year that there is aone-in-seven chance of gold rising above$2,000/oz and a one-in-seven chance of itfalling below $925/oz. On past trends, thehigher price is more likely, but while ourforecast is bullish, it is not that bullish.There is a lot of external bad news such as theeurozone crisis and risk of war in Korea, plusinternal supply/demand good news, such asstrong Chinese demand. But gold prices areforward-looking, and this backdrop justifies thecurrent price more than it guarantees higherfuture prices.

Constrained supply and loose globalmonetary policy should mean further gains,

however. Our forecast peak will come duringthe next leg of the financial crisis, e.g. aeurozone default or surge in Chinese inflation.The low will occur as strong US economic datathreatens tighter Fed monetary policy, boostingthe dollar. Central bank activity will be awildcard.

Range: $21.00 - $39.00Average: $30.00Silver zoomed to $30/oz in the last

quarter of 2010, more than 50% higher in justover three months. Its not hard to make a casefor silver given that we saw a strangecombination of fear-induced gold buying andoptimism-induced copper buying bothtraditional drivers of silver. However, themagnitude of silvers rise was unexpected.As we forecast higher gold prices, higher silverprices seem a must and $50/oz cannot be ruled

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out. But we think the outperformance of 2010might give way to underperformance in 2011and so silvers average price will be similar tothe current price.

Range: $1,570 - $1,990Average: $1,775A 20% price gain over 2010 is not

disappointing, but platinum was the laggard ofthe precious metals in 2010, especially incomparison with palladium and it remains along way from its 2008 highs. The metalstruggled under the expectation of poorautomotive demand, as European diesel sales fellin H2 10.

The outlook is bullish, but huge gains areunlikely. The high end of our forecast will comeon production shocks always an underlyingthreat and the low end if some of thespeculative money comes out of commodities.The relatively narrow range, however, underliesour view that platinums price is more based on

S&D than other metals and so is less prone to aspeculative shock either way.

Range: $625 - $945Average: $785Palladiums astonishing price gains have

naturally raised fears of a speculative bubblewith 2 Moz of palladium held in ETFs, 1 Moz ofthat accumulated in 2010.

Yet it is more obvious with palladium thanwith many other commodities what speculatorsare speculating about a shortage of metal. Inpalladium, which long suffered under surpluses,this seems extraordinary; but on the supply side,Russian stock sales seem to have dried up, whileon the demand side, the fast-growing carmarkets are mainly gasoline-engined and hencepalladium-using. This means the price is wellsupported, although 2011 is unlikely to see arepeat of 2010s huge gains. The key risks are aslump in Chinese car sales as tax incentives arewithdrawn or a surprise Russian stock sale. Alonger-term threat that could become clearer in2011 is how attractive electric cars are withconsumers.

Bhargava VaidyaBN Vaidya & Associates, Mumbai

Range: $1,250 - $1,550Average: $1,375Investment demand in gold will remain

high. Economic crisis in the US and eurozonewould make gold remain a very important storeof value in all investment portfolios. Thephysical demand for jewellery will be low butwould be more than offset by investmentdemand. ETF interest would support a bull run.

Range: $19.00 - $42.00

Average: $27.50Silver would remain volatile. Its

relationship with gold will support a bull run.Last years performance of the metal will attractfurther investment in silver.

There is a fear that regulators may take some

restrictive action on growth of stock in silverETFs, creating metal scares for manufacturingindustries.

Fabrication demand for silver for silverwareand jewellery will go down. Industrial demandfor silver will remain flat. Investment demandfor silver would remain a driving force.

David WilsonSocit Gnrale, London

Range: $1,330 - $1,650Average: $1,500The outlook for an extended period of

low interest rates, meaning that real interestrates would be negative in the US for all of 2011,should be an important feature supporting goldprices during the year. The official sector islikely to be a net buyer, while other institutionaland retail investment is also expected to remainstrong as investors look to hedge against longer-

term inflationary forces.

Range: $25.00 - $33.00Average: $29.50Investor demand for silver should

remain strong in 2011 as real interest ratesremain low and the global economy continues torecover, playing to silvers strengths as both anindustrial metal and as a proxy for gold.

Range: $1,600 - $1,900Average: $1,780

Range: $650 - $850

Average: $755Palladium is expected to continue to

rise as investors anticipate dwindling Russiansales, while tightening emissions legislation andthe economic recovery boost auto demand.

WolfgangWrzesniok-RossbachHeraeus Metallhandelsgesellschaft mbH,Hanau

Range: $1,190 - $1,550Average: $1,3252011 should initially be another bright

year for gold, with new records expected in Q1.Bigger setbacks are not very likely before spring,and even if they occur, should not imply animmediate end to the multi-year uptrend. Thisis only likely to happen once the interest rateenvironment in Western countries starts tochange structurally, perhaps towards the end of2011.

On the supply side, higher production isprobable; the inflow of scrap metal should fall.Central bank selling is going to be non-existentin 2011, but there could well be more hedgingby mines as junior producers could be forcedinto securing gold prices as part of theirfinancing packages. On the demand side,investment is projected to have peaked in 2010and should be neutral in 2011. Early profit-

taking by more short-term oriented investors islikely to be matched by ongoing physicaldemand for bars and coins in Western markets.ETF holdings are expected to be slightly up inthe first months and then subside.

Range: $1,16.00 - $32.00Average: $21.00The overall price trend of silver will

continue to depend largely on the price of gold.But, given the more industrial character of themetal, several independent influencing factorsalso exist, which should regain more importanceonce investment demand dries up. Providedthat there are no severe setbacks for the Chineseeconomy, consumption of silver in electronicapplications and in the photovoltaic sector isexpected to grow further. This will onlypartially be offset by a reduction of silver usagein the photo and jewellery industries.

In the long-term, current price levels do,however, pose a grave threat to the important,

and usually relatively stable, industrial demandas end-users are already looking to reduce oreven replace silver by non-precious metals.This is coupled with an expected increase inmine production and higher supply fromrecycling. As a result, the silver price mightfollow gold to reach new highs over the nextmonths. Over the course of the year though, itseems unlikely that price levels above $25 willprove sustainable.

Range: $1,450 - $1,850Average: $1,600Platinum continues to have difficulties

in keeping pace with the other precious metals.The main reason is that the offtake by the carindustry will further diminish as the white metalis being increasingly replaced by other (andcheaper) precious metals. In addition, theimportant European car market is facing yetanother difficult year in 2011. As far as investordemand for ETFs is concerned, a slowdown inthe coming months is expected.Production should again rise slightly, especiallydue to an output increase by junior mines inSouth Africa. At the same time, the inflow ofscrap metal is expected to grow, both from the

car sector as well as on the jewellery side.

Range: $550 - $850Average: $675Palladium is initially perceived as in

relative terms the best-performing preciousmetal. Nonetheless, the price is expected to fallin the second half of 2011 as the metal mostprobably will not be able to escape the projectedgeneral consolidation mood. One stabilisingaspect will be the good demand from theautomotive industry in emerging markets;coupled with a slow recovery of the Americanmarket and a neutral offtake in Europe. Inaddition, demand from the electronic industry isseen to rise. Another plus is the expected endof sales from Russian state-owned stocks, whichhas been a reliable supply factor over the pastyears. This, though, will be partially offset bythe expected substantial increase in scrap inflow.

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