The demand for gold could rise strongly in 2015 thanks to the rising demand from Asian consumers for the precious metal. The fact that many investors are finding their way back to exchange traded products that are backed by gold will also play a big part in 2015.
That is HSBC Securities’ opinion, at least. Analysts James Steel and Howard Wen wrote in a report this week that they expect the demand for gold to rise by 15 percent to 4127 tons. Consumption reached an all-time high in 2011 of 4580 tons, when the price of gold peaked north of 1900 dollars.
We all know what happened to the gold price in the meantime and that ETFs backed by gold had a lot of outflow; at the same time the dollar and US stocks gained strength. Last year gold was strongly held back by the economic growth slump in China and import restrictions on gold in India. The rising demand for gold from Asia can support the price of gold and other precious metals after many tested new lows, said Barclays earlier this week in a report.
Modest Recovery
The demand for jewelry, coins, and gold bars dropped in 2014 from exceptionally high levels in 2013 and Steel and Wen expect a modest revival in the right direction for demand this year. This is mostly based on expected demand from China and India, where the economic long term outlook and demographic trends will support precious metal demand.
The analysts expect that the gold price will trade between 1120 and 1305 dollars per ounce this year because of the sensitivity of buyers in upcoming markets. UBS analysts lowered their forecast for 2015 from 1200 dollars to 1190 dollars, in contrast. They state that the strong dollar and higher interest rates will hinder gold significantly.
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