By: Myra Saefong
April 16, 2014
The World Gold Council expects Chinese demand for gold bars and coins to climb 25% by 2017 from last year’s record level, according to a report issued Tuesday.
The report came out on a day when prices for gold futures on the Comex division of the New York Mercantile Exchange were suffering from a hefty decline. Gold for June delivery
Demand for gold bars and coins from China reached a record of 397 metric tons in 2013, up 38% over the previous year, with the climb “connected to the relatively limited set of investment options for savers in China,” the WGC said. Read the full report.
Following that strong demand, the WGC expects this year to be a year of consolidation, but medium-term prospects are “very positive” and demand could reach close to 500 metric tons by 2017 – representing a roughly 25% increase from 2013’s level.
The WGC also said that Chinese private-sector demand for gold from all sources may climb to at least $1,360 metric tons by 2017, up about 20% from last year.
Chinese investors will “continue to fear the potential for much higher inflation as a result of credit and money supply growth, and their access to foreign markets will still be heavily restricted,” the WGC said. The aging population’s pool of savings will also continue to grow and gold should benefit from this process, it said.
Risks to the investment forecast, however, include a worse economic or financial crisis than allowed for in the economic outlook that leads to a major destruction in wealth and collapse in liquidity, and a downtrend in gold prices in 2015-2017 that may potentially shake investors’ faith in the metal, the WGC said.
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