Citi upgrades its 0-3 month forecast for platinum, palladium and silver

Citi raised its 0–3 month price targets for platinum group metals (PGM) and silver, the bank said in a note on Tuesday.

It lifted platinum to $1,250 per ounce and palladium to $1,050 per ounce, citing stronger China jewelry fabrication, investment demand and the risk of physical market tightness.

Spot platinum PL1! was steady at $1,364.10 per ounce and was up 51% so far this year. Palladium XPDUSD1! was 0.1% up at $1,198.33 per ounce and gained over 31% so far this year.

"The sustainability of the rally rests ultimately on whether end-use jewelry consumption can pick up in China," Citi said.

Additionally, supply risks for PGMs are rising due to potential sanctions on Russia and Impala Canada's decision to accelerate the closure of the Lac des Iles mine, which has also supported palladium prices, the note added.

Citi revised its silver price forecast for 0-3 months to $40 per ounce and noted that it expects prices to average $42 in the fourth quarter of this year, versus $40 earlier.

Spot silver XAGUSD1! was trading around $37.69 after climbing to its highest level since 2011 at $39.15 on Monday.

Citi maintained its 0-3 month price target for gold at $3,300 an ounce.