If gold continues to hit record-high prices, this seems to be causing some buyers to hold back the physical market, although the metal remains underpinned by investment demand, says Commerzbank.
It cites a report from the Bombay Bullion Association shows that India, the world’s largest consumer of gold, imported 32.6 tonnes of gold in September, down from 39.7 tons in the period one year ago.
Turkey imported gold in less than one month earlier in September, according to the Istanbul Gold Exchange, with imports down by two thirds to 2.45 tons.
“This is clearly price-sensitive nature of jewelry demand shows, as clearly weakens the high price level, the dependence of investment demand rises …”, says the bank.
However, this investment remains strong, Commerzbank adds. “A sharper fall in prices not on the cards as gold should benefit from the prospect of quantitative easing, and as a stable alternative currency,” says the bank.
She cites extensive quantitative easing and lower interest rates from the Bank of Japan earlier Tuesday. “Gold is likely to keep the upward trend for now,” concludes Commerzbank.
source: commodityonline
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