Investor appetite for gold expected to stay strong: Sucden
Washington (Platts)--23Jan2013/308 pm EST/2008 GMT
Investor appetite for gold is likely to remain strong this year given
the ongoing debt worries in Europe and the US and the possibility of
additional stimulus measures, analysts with UK commodities brokerage Sucden
"While the improved macroeconomic picture reduces the likelihood of
additional gold-positive monetary stimuli -- although debt worries in the EU
and US have merely been postponed rather than resolved -- we feel there is
still room for QE/stimulus should the need arise," Sucden analysts said in a
report, referring to recent quantitative easing actions by central banks.
Along with concerns about debt and economic growth, inflation concerns
in India and deflation concerns in Japan are likely to provide further
support for gold prices, Sucden analysts said.
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"China and India are likely to enjoy strong growth this year as economic
conditions in both countries improve, the caveat being the Reserve Bank of
India's continued efforts to reduce its trade imbalance, which it attributes
largely to gold imports," the analysts said.
Turning to supply, the Sucden analysts said current volumes of gold from
recycled jewelry were likely to continue, but noted that primary supply
outside of China remained minimal.
While China continues to report strong economic growth, "none of its
supplies has entered into the global supply stream," the analysts said.
Market analysts polled by the London Bullion Market Association recently
forecasted an average gold price for $1,766/oz, with 77% of those polled
expecting a break above $2,000/oz at some point this year.
"We echo the bullish general market consensus, but while we feel that
gold will record a broad range of $1,550-1,985, we see it struggling to
achieve the $1,844 average forecast by eight leading investment banks,"
the Sucden analysts said. "Instead, we see gold setting an average closer to
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