Support for gold prices will come from China according to the Bank of America/Merrill Lynch who expect Chinese buying from both the government and the regulatory changes that now allow the Chinese public to own gold.
Gold prices, which have taken a breather in the last two days, could get help in coming months from Chinese demand for bullion, says one analyst. Bank of America/Merrill Lynch expects China “to provide continued support to gold prices going forward,” and maintained a medium-term gold price target of $1,500 an ounce for gold. China’s demand for gold has flourished thanks to a slew of regulatory changes, analyst Michael Widmer wrote in a recent report.
China liberalized jewelry market and also lifted restrictions on “gold hoarding,” unleashing “significant pent-up investment demand,” he added. China is now the biggest gold producer in the world as authorities have tackled supply issues and gold production has expanded fast. Government itself has also been a steady gold buyer, raising its gold holdings to 1,054 tons in recent years.
Gold for April delivery ended down $8.10, or 0.7%, at $1,009.50, closing below the $1,100-an-ounce mark for the first time since Feb. 24. It was the second consecutive day of losses as the dollar rose for much of the session.
— Claudia Assis
Looks like we have a way to go then!
Have a good one.
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