In the middle of next week, the World Gold Council (WGC) will publish its report on the golden demand in the first quarter. This is likely to show that the sharp increase in the price of gold in the first three months of the year was motivated by a high demand for investment. It is already known that the FNB Gold recorded 226 tonnes in the first quarter, notes the raw material analyst of Commerzbank, Carsten Fritsch.
The demand for jewelry drops in the middle of the price peak
“This alone should give a strong increase in investment demand, because there were only small entries in the previous quarter and even perceptible outings in the same quarter of the previous year. The demand for jewelry, on the other hand, has probably suffered from the sharp increase in prices, such as low imports of gold in India and China already suggested.”
“The image is completed at the beginning of the week by the data on the gold trade between Hong Kong and China for Mars. Another interesting aspect of the WGC report is the gold purchases of the Central Bank. Like the majority of purchases have been made not reported for almost three years, the monthly data available represent only a small part.”
“However, the high levels of purchase of the previous quarter and the same quarter of last year are unlikely to be reached, when the central banks have bought more than 300 tonnes of gold each time. The WGC report should not however have an impact on prices. Instead, the price of gold should continue to be motivated by the high level of uncertainty.”
