Demand for gold drives Gold Price
By Wu Jin | April 19, 2018
The price of gold is expected to grow sustainably from the third quarter this year, a Chinese annual revealed recently.
Jointly issued by the China Gold Association, the World Gold Council and British Metals Focus Ltd, the annual showed a positive outlook for the growth curve of gold prices, particularly starting in July 2018.
The international gold price opened at US$1,302.70 per ounce at the start of the year, closing at US$1,324.95 per ounce at the end of the first quarter; it is now fluctuating around US$1,330.06 on average, registering year-over-year growth of 9.06 percent.
Despite the minor fluctuations, which are predicted to last till the end of the second quarter, gold prices are forecasted to increase in the third quarter, following the weakening of the U.S. dollar, fluctuating stock markets and dented confidence in global economic performance.
Moreover, according to Wang Lixin, the general manager of the Chinese division of the World Gold Council, geopolitical uncertainties may also drive up the price.
“Gold sold well in the previous year,” he added while forecasting a simultaneous rise of gold prices worldwide in the following months this year, explaining that growth is likely to be maintained due to market readjustments, timely supply and increasing transparency of transactions.
In 2018, gold demand is expected to rise by 1.5 percent globally, buttressed by the increase of jewelry sales, industrial applications and physical gold investments.
Taking recycled gold, for instance, the supply is expected to grow by 2 percent this year, with a host of customers dominated by developing countries.
Also according to the annual report, demand for gold jewelry, stimulated by the two major purchasing powers China and India, is likely to rise this year.
Meanwhile, investments in physical gold are growing, especially in the Chinese market, thanks to improving price projections and investors’ strong desire to keep their assets safe. Additionally, the development of electronic sectors is also boosting gold demand for industrial use.
Song Xin, director of the China Gold Association, said, “With the growth of high-end consumption and the development in second- and third-tier cities, the Chinese market will show its substantial demand, mostly unexplored, for physical gold, as more and more people start to realize gold’s stored and retaining values in the long term.”