CO: Gold could hit $1600 by the end of this year : GFMS
SHANGHAI (Commodity Online) : Major precious metals reserech consultant firm GFMS said Gold's decade-long price rally could take the metal above $1,600 an ounce by the end of the year.
GFMS also said world’s largest gold bar and coin consumer China could import more gold this year.
According to Philip Kalpwijk, executive chairman of GFMS, Chinese demand for gold bars and coins as private investments could push bullion imports above 400 tons in 2011.
Increased appetite for silver investment products too, combined with a forecast 16 percent annual growth in industrial demand, means China's total silver consumption could outstrip domestic supply this year, he added.
Speaking at a conference here he said “There is a widening demand for silver as an investment in China because of its lower entry point. It is also being increasingly recognized as an physical investment asset, which will support demand," .
The Chinese government does not publish official statistics on gold imports but the World Gold Council said the country produced 340 tons in 2010.
Last year, total consumption was about 700 tons, leaving a gap of around 300 tons made up either by imports or sales of existing stocks.
The surge in imports, which jumped fivefold last year, has turned China, already the largest bullion miner, into a major overseas buyer. GFMS forecasts imply that imports will continue to grow at a robust pace despite high gold prices.
The explosive demand has been stoked by concerns about inflation and poor returns in the stocks and property sectors. It also been aided by Beijing's encouragement of retail consumption, such as expanding the number of banks allowed to import bullion.
GFMS said China's investment demand for gold could hit 300 tons this year, up from 200 tons in 2009. Investment demand for silver stood at around 260 million tons in 2010, the group said.
China National Gold Group Corp predicted that China's bullion output could reach 400 tons by 2014, a gain of nearly 19 percent from 2010. Consumption was set to grow by nearly a quarter to 700 tons, implying a supply shortfall of about 300 tons in three years.
