Palladium, the top performer in 2017 within the precious metals complex, was forecast to head higher throughout 2018 by refiner MKS PAMP Monday, with an average price of $1,230/oz predicted and a possible high of $1,420/oz.
Palladium closed last year 54% up on the start of 2017, leading MKS's Frederic Panizzutti, global head of sales and business development, to see the metal topping the charts again in 2018.
Palladium was spot bid at $1,122/oz as of 1505 GMT Monday.
"The already massive years-long supply deficit is set to further increase this year," he said.
According to the refiner, the China Passenger Car Association expects car sales to grow by 4% in 2018, which is partially offset by US sales expected to decline 2%.
"Still there is a slow but certain shift from diesel into gasoline cars, especially in Europe. The jewelry and industrial demand is also set to recover further," he added.
On the other hand, the car industry will likely attempt to start shifting from palladium to platinum in auto catalyst production, "but this will not happen overnight," Panizzutti said.
MKS expects palladium to attract decent speculative interest and to trade in "very volatile sessions with ample moves."
Looking at platinum, a high of $1,100/oz is seen, a low of $920/oz and an average of $1,008/oz.
Platinum was spot bid at $996/oz, as of 1505 GMT Monday.
"We are taking into consideration a possible decrease in mining supply as a result of South African mine closures in H2 2017. Some other mines reduced production stating they prefer to focus on value over volumes and to remove unprofitable ounces from production," he said.
Platinum was the laggard of the complex in 2017, hard hit by negative press regarding diesel engine production/usage.
MKS was also bullish gold, seeing a high of $1,440/oz and a low of $1,220/oz, with an average forecast of $1,365/oz.
Gold was spot bid at $1,340/oz as of 1505 GMT Monday.
"As demand is set to improve the supply side will remain under pressure. This combined with ongoing geopolitical tensions -- and the official sector expected to be a net buyer -- prompts us to [be bullish]," he said.
In terms of silver, MKS sees a high of $20.20/oz, a low of $16.20/oz and an average of $18.60/oz.
"We do expect more speculative buying to kick in over the course of the year providing some short to medium term support and an acceleration in the upside swing. Erratic and volatile sessions are likely," Panizzutti said.
Silver was spot bid at $17.33/oz as of 1505 GMT Monday.
