gold set to breach $2,000 by year-end - gfms - gold jewellery set
Gold could break through $2,000 an ounce in a year.
Metals consultancy GFMS said in a report on Thursday that gold prices hit a new high as inflationary pressures in Asia and Western debt concerns led to a recovery in investment demand.
The company said that while investment was weak earlier this year, jewellery purchases rose sharply as prices climbed to record levels, while central bank holdings and scrap supplies remained sluggish.
World gold investment is forecast to grow over a quarter --on-
Production in the second half of this year reached 1,069 tons, mainly due to soaring bar demand, which may push the market up sharply.
"Obviously, low investment data is the first time in large part --
Quarterly story, "said Neil Meidel, research director at GFMS.
"Once the Western divestment stops, you will have investment back when the jewelry market is still strong and the scrap is not playing a huge role.
"Putting in hundreds of tons of official department purchases, you get some very interesting price pressures," he said . ".
A prediction of 43 people5 percent year-on-
Implied net investment fell year on year
Mainly reflects the activities of the exchange
In COMEX and over-the-
Is a reflection of profit.
Meader said it was taken earlier this year.
But the low interest rate environment, lack of confidence in paper money and concerns about sovereign debt remain important factors to support gold interest.
World investment grew by 1% to 1,693 tons throughout the year.
Sold out on the exchange
In the first quarter of this year, major gold funds recorded the largest quarterly outflow recorded, and trading funds have partially reversed, indicating that interest in these products has recovered.
This year has been strong gold bar buying, rose 43% in the first half of the year, is expected to remain strong for the rest of this year, GFMS is expected to further increase 8% in the second half of the year.
"We 've seen periods where ETF demand is not very large, and to some extent it's due to the fact that some people are moving ETFs into allocated metal accounts because it's a lower period --
"The cost of holding gold," said Meader . ".
"This happens when you have new entrants in the market.
Etf is very obvious and easy to understand, which attracts new participants, but will attract new participants once they are more familiar with gold. . .
If their position reaches a certain size, they may convert to the assigned metal.
Meader said the strength of the jewelry manufacturing industry has risen by 7.
Gold demand in the first half of the year was 5% to 1,037 tons, which masks a more complicated situation in one of the biggest links in gold demand.
GFMS said the rally focused on Asia, which was recently acquired by Thomson Reuters.
Excluding China and India, manufacturing in other parts of the world has fallen by 4%.
Demand in India has risen by 52 tons, while Chinese purchases have increased by 40 tons.
However, the company said the premium gold used indicated that the purchases were for investment purposes and not for decoration.
"The purchase we see is essentially a form of investment," said Meader . ".
"What is being purchased is very high --carat, low-
Margin jewelry purchased for investment purposes.
Some of them are being purchased because people want to lock in their purchases before the expected price increases.
Others buy and sell jewelry almost on the basis of speculation.
Jewelry manufacturing demand is expected to climb 1% to 2,032 tons throughout the year.
Although gold prices rose to a record $1,920, the amount of gold spent on the market continued to weaken. 30 an ounce.
In the first half of the year, scrap supply fell by more than 7% to 752 tons.
GFMS predicts prices will rise 11% in the second half, saying prices may have to return to more than $1,900 an ounce before mass scrap sales resume.
GFMS said that the decline in jewelry demand and the increase in scrap sales may be an early indicator of a sharp price correction.
In the first half of 2011, central bank purchases increased from 72 tons a year ago to 216 tons.
GFMS expects the official department to buy another 120 tons in the second half, up from 5 tons last year.
In terms of market supply, the company said mine supply will inevitably reach a record level in 2011, with production growing by 4% to 1,469 tons in the second half of this year.