Money Markets
Rising demand for gold expected to bolster prices
A customer admiring gold bracelets. Gold rallied to two-week highs of about $1,120 an ounce on Tuesday as the euro recovered from recent hefty losses against the dollar. Photo/FILE
Posted Thursday, February 18 2010 at 00:00
Still, India saw jewellery recover by 27 per cent in the last quarter of the year versus the same period in 2008, holding its position as the world’s top consumer of the precious metal.
India’s central bank purchase of 200 tonnes of gold in November has underpinned growing optimism the bullion remains a good save-haven investment.
The council said it is unclear if that optimism will persist in Indian given high prices.
Following closely was Greater China, which includes Taiwan and Hong Kong, with 461.9 tonnes in gold demand last year, up 7 per cent year-on-year on strong retail investment demand.
China has been rapidly gained ground against the perennial No.1 gold consumer, India, raising expectations it will soon overpass the South Asian country as the market’s main player.
“In the absence of sharp fluctuations in the gold price, demand is likely to remain firm (in China) as we head into 2010, particularly in the run up to Chinese New Year,” the report said.
Still, investment in most non-western countries will likely be closely linked to the health of the world economy as budget constrains weights on consumption, the council said.
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