While most analysts predict the Fed's decision to stand pat is the main factor which will drive the prices of gold, Commerzbank notes the yellow metal may also receive a boost from Chinese and Indian demand in the coming months.
The bank refers to Swiss customs data showing that Switzerland exported 173.9 tons of gold in August, 8% more than in the previous month, with nearly 70% of this shipped to Asia.
50% of gold was exported to China, while exports to India remained constant month-on-month, the bank said.
“Exports to Hong Kong were
actually more than twice as high as in July, which suggests that China
also imported more gold from Hong Kong last month.”
The lender notes that corresponding
figures will be posted by the Census and Statistics Department of
the Hong Kong government in the next few days.
“India is
also likely to import more gold again in the coming months given that
the All India Gems & Jewelry Trade Federation predicts that gold
demand there will pick up noticeably in the fourth quarter,”
Commerzbank says.
Gold demand could
apparently grow by as much as 15% year-on-year to around 250 tons due to low prices. This would constitute the highest fourth-quarter figure since 2012.
Demand from India traditionally peaks in the fourth quarter as the
festival season begins at the end of September and the wedding season
starts in November.
“Increased gold demand in India and China should lend support to the gold price,” Commerzbank concludes.
