Gold is forecast to extend price gains in the Year of the Dragon and hit US$2,300 (HK$17,940) per ounce in the first half, said Haywood Cheung Tak-hay, permanent honorary president of the Chinese Gold and Silver Exchange.
Gold prices slipped on Monday ahead of US inflation data and comments from Federal Reserve officials that could offer insights into the central bank’s interest rate plans.
Spot gold was at one stage down 0.2 percent to US$2,020.97.
Jim Wyckoff, senior analyst at Kitco Metal, said interest rate cuts would probably be pushed to the second half of the year as US economic data has been too strong lately to see a rate cut by May.
If the greenback continues to strengthen, it will put pressure on gold prices, making movements on the market for the precious metal more complicated.
Last week, several Fed policymakers, including chairman Jerome Powell, said they would wait until they were more confident that inflation would fall to 2 percent before they cut rates.
Americans reported a fairly stable outlook for inflation at the start of the year, a New York Fed survey showed.
Pending any Fed rate cuts, strong physical demand and official sector buying are projected to lift prices to an average of US$2,200 per ounce next quarter, said Bart Melek, head of commodity strategies at TD Securities in a note.
Following the slight decline on Monday, gold prices advanced to US$2,027.77 yesterday.
In China, the market is getting hotter in the Year of the Dragon.
According to BullionVault, the world’s biggest online bullion market, household gold demand in the mainland jumped 24 percent to a record US$56 billion last year.
That is spurred on by current worrying geopolitical tensions, coupled with a pessimistic financial and economic outlook that has driven large household demand.
Gold is considered a symbol of good luck in the country and often bought as a gift, and in that regard, this year will be a particularly good one.
“Many people will try to get married and have babies in the Year of the Dragon,” said Cheung, which will drive up demand.
Credit: Source link