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Gold expected to average $1558/oz in 2020 - GFMS

The latest Refinitiv GFMS Gold Survey showed on Thursday, global demand for gold fell in the last quarter of 2019 amid reduced demand from investors as well as from the central banks.

Key Findings:

Central banks and investors had bought large amounts of gold earlier in the year, helping push gold prices up 18% in 2019 to the highest level since 2013.

Higher prices, however, caused some buyers – particularly retail consumers in top markets China and India - to reduce their purchases.

Total physical demand for gold over October-December was 1,033 tonnes, down 9% from the same period in 2018.

Fabrication of gold jewellery fell 9% year-on-year in the fourth quarter to 509 tonnes, retail purchases of bars and coins were down 7% at 297 tonnes and central bank buying was 18% lower at 132 tonnes.

Exchange-traded products holding gold on behalf of financial investors - which Refinitiv GFMS does not classify as physical demand - added 35 tonnes to their inventories, compared with 110 tonnes of additions in October-December 2018.

On the other side of the market, supply dipped 2% year-on-year in the fourth quarter to 1,185 tonnes

Comments from Refinitiv GFMS analysts:

“While demand from key Asian markets will likely remain weak this year, ongoing central bank purchases and renewed investor interest will lend support for higher gold prices.” 

“We therefore expect gold to average $1,558/oz in 2020, with a possibility to test and move beyond $1,700/oz later in the year.”

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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