LINE

Text:AAAPrint
Economy

Gold industry analysts expect price boost from currency war fears

1
2015-08-24 09:21Global Times Editor: Li Yan

Gold prices could rise above $1,200 an ounce in the next few months as fears of a currency war following the devaluation of the yuan roil equity markets, boosting demand for bullion and gold ETFs, leading industry analysts said at a conference.

The metal has already -rebounded about 8 percent from July's 5.5 year low, boosted by minutes of the Fed's last policy meeting that dented expectations for an imminent rise in U.S. rates. Spot prices hit a peak of $1,168.40 on Friday.

"After the devaluation of the Chinese currency, people are worried," said Rajan Venkatesh, head of India bullion at ScotiaMocatta, part of Canada's Bank of Nova Scotia. "They are afraid of a currency war. They are going back to gold."

Prices could rise to $1,230 to $1,240 within a month, he said on the sidelines of the International Gold Convention in the city of Panaji in western Goa state.

Michael Mesaric, chief executive of the world's biggest gold refiner, Valcambi, said deposits in gold-backed exchange-traded funds are hovering near their lowest levels since 2008 but current prices will attract new buying.

He expects gold prices to rise to $1,350 by mid-2016.

The recent bounce notwithstanding, gold has been under heavy pressure this year from expectations the Fed will raise rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding bullion while boosting the -dollar.

But analysts like Jeffrey Rhodes, founder of Dubai-based precious metals consultancy RPMC, said "all the bad news for gold is in the press."

"There is room in the world for strong dollar and strong gold," said Rhodes, expecting higher demand in countries such as India, China and Greece, where currencies are depreciating. "And strong gold is an alternative to emerging market currencies."

Gold gained further traction, as many investors opted to shelter their cash from the darkening economic outlook.

"It would appear that the metal has regained its status as the ultimate safe haven asset," said analyst Fawad Razaqzada at trading firm Gain Capital.

"Equities have come under severe pressure in recent days, with the US and European indices joining the Chinese market turmoil.

The price of gold slumped in July, the start of the third quarter, striking its lowest level in more than five years at $1,072.35 an ounce.

  

Related news

MorePhoto

Most popular in 24h

MoreTop news

MoreVideo

News
Politics
Business
Society
Culture
Military
Sci-tech
Entertainment
Sports
Odd
Features
Biz
Economy
Travel
Travel News
Travel Types
Events
Food
Hotel
Bar & Club
Architecture
Gallery
Photo
CNS Photo
Video
Video
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Bilingual
Resources
ECNS Wire
Special Coverage
Infographics
Voices
LINE
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.