WGC Official: Asian Gold Demand May Temporarily Dip Due To High Price
Berlin—(Kitco News)The high price of gold could temporarily dent demand from the key Asian region, but is unlikely to end the historical pattern of buying for key events such as weddings, a World Gold Council official said Monday.
Albert Cheng, managing director of the Far East for the Gold Council, addressed the region’s demand prospects in an interview with Kitco News on the sidelines of the annual London Bullion Market Association conference in Berlin. The conference is taking place as gold hit $1,300 an ounce for the first time.
“I’m sure jewelry demand in Asia will be affected temporarily, because both the consumers and the trade need to adjust to this new price level,” he said.
Still, he looks for the demand pattern to return. He pointed out that 20% of the gold buying in the key consuming nations of China and India is for wedding gifts. Those with a budget have to adjust and may end up buying smaller jewelry pieces, he continued.
“But in the long run, they need to readjust their budget levels,” he continued.
Gold jewelry in Asia tends to be in a high number of carats, either pure gold or close to it, he explained. Jewelry is bought not just for adornment but as an investment.
Meanwhile, he suggested exchange-traded funds are likely to become more popular in Asia. These are products that trade similar to a stock but track the price of the commodity.
Albert Cheng, managing director of the Far East for the Gold Council, addressed the region’s demand prospects in an interview with Kitco News on the sidelines of the annual London Bullion Market Association conference in Berlin. The conference is taking place as gold hit $1,300 an ounce for the first time.
“I’m sure jewelry demand in Asia will be affected temporarily, because both the consumers and the trade need to adjust to this new price level,” he said.
Still, he looks for the demand pattern to return. He pointed out that 20% of the gold buying in the key consuming nations of China and India is for wedding gifts. Those with a budget have to adjust and may end up buying smaller jewelry pieces, he continued.
“But in the long run, they need to readjust their budget levels,” he continued.
Gold jewelry in Asia tends to be in a high number of carats, either pure gold or close to it, he explained. Jewelry is bought not just for adornment but as an investment.
Meanwhile, he suggested exchange-traded funds are likely to become more popular in Asia. These are products that trade similar to a stock but track the price of the commodity.
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