Australia & New Zealand Banking Group Ltd predicted that gold demand in Asia is likely to double by 2013 and drive prices to a record, as investment and jewelry purchases climb.
Demand from retail and institutional investors will surge to
almost 5,000 metric tons a year by 2030 from 2,500 tons, as Bloomberg reports referring to ANZ. Prices may rise to more than $2,000 an ounce by 2025 and
to $2,400 by 2030, analysts said.
The bank supplied more than 20 percent of China’s gold imports last year.
“The bedrock, the anchor of our views of increasing demand for physical gold will come from rising incomes in Asia,” Hogan, chief economist at ANZ, said by phone from Sydney on Wednesday. “Gold is going to have that investment role and it’s going to become more prominent.”
At the moment, the bank has a short-term target of $1,100. However, it supposes that prices will increase through 2030 on growing wealth in Asia, rising investment by money managers and expanding holdings at emerging-market central banks. If China’s shift to a more open economy is uneven and global financial instability continues, the price may surge to $3,230, it said.
Aging investors are likely to boost holdings in defensive assets, which can also spur bullion demand. The development of Asia’s financial systems increases funds under management, which may also have a certain impact on gold, Hogan said. Central banks may add to holdings to diversify reserves and shore up confidence in newly floated currencies.
Globally, governments added 477.2 tons to reserves in 2014,
the second-biggest increase in 50 years, according to the
London-based World Gold Council. Central banks have increased
reserves for the past five years, a reversal from two decades of
selling since the late 1980s. ANZ’s prediction includes China, India, Indonesia, Japan,
South Korea, Malaysia, the Philippines, Singapore, Thailand and
Vietnam. The bank says it handled the equivalent of 12 percent
of global primary production last year, making it one of the
world’s biggest physical gold distributors.
According to the World Gold Council, demand in India and China, the world’s biggest buyers, will total 900 tons to 1,000 tons each this year and central banks will buy at least 400 tons, says Bloomberg.
On Wednesday gold for immediate delivery was at $1,151.04 at 11:42 a.m. in Singapore. Prices rose to a record $1,921.17 in 2011 and fell to a four-year low of $1,132.16 in November.
Bullion is trading near the lowest level since 2010 and in 2014 posted the first back-to-back annual drop in 14 years
as assets in exchange-traded products contracted, the dollar
was stronger and U.S. equities rose.
