$GLD, $XAU, $XAG
FLASH: Global demand for gold in Y 2019 will rise to the highest in 4 years as higher consumption by the world’s jewelers offsets a fall in purchases by central banks, an industry report says..
The world will consume 4,370 tonnes of gold this year, the most since Y 2015 and up slightly from 4,364 tonnes in Y 2018.
The Gold Focus 2019 report predicted gold prices would average $1,310 an ounce this year, up from $1,268 in Y 2018 and the highest since Y 2013.
Gold consumption for jewelery will rise 3% this year to 2,351 tonnes, driven by increases of 7% in India and 3% in China, the 2 largest markets which will counter lower demand in the Middle East, Metals Focus said.
Purchases by the official sector, which surged almost 75% in Y 2018, as central banks added gold to diversify their reserves, will slip 9% this year to 600 tonnes, the report predicted.
Physical investment demand will remain largely unchanged from Y 2018 at 1,082 tonnes.
Metals Focus said gold supply would rise by 1% to 4,707 tonnes thanks to higher mine production and recycling and some producer hedging.
Helping gold prices to rise would be the end of interest rate rises by the U.S. Federal Reserve, along with political and economic uncertainty around the world, Metals Focus said, but it added that a strong dollar would limit gains.
Gold is traditionally seen as a safe place to invest during periods of uncertainty.
Higher interest rates hurt gold because they make bullion, which pays no yield, less attractive to investors, while a stronger USD can depress demand by making gold more expensive for buyers with other currencies.
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