(
Global Times)
10:15, August 25, 2012
The prices of gold bounced back Thursday, reaching a three-month high of above $1,660 per ounce, driven by good prospects for the global economy.
As a result of the rebound, gold stores in Beijing raised their retail prices of gold jewelry for the sixth time this year.
At Beijing Caibai Gold Company and Gongmei Group, the price per gram for AU9999 (99.9 percent gold) rose by 10 yuan ($1.57) to 405 yuan and the price per gram of AU9990 (99 percent gold) increased 7 yuan to 399 yuan Wednesday.
The prices of gold jewelry in Shenzhen and Chengdu have also risen in recent days, Wang Ruilei, chief analyst at Chengdu-based Boyin Precious Metal Investment, told the Global Times Thursday.
"In the short run, the rebound was caused by market expectations that the US Federal Reserve will launch another round of quantitative easing, as well as the European Central Bank's declaration that it would defend the euro," Zhang Bingnan, vice president of the China Gold Association, told the Global Times Thursday.
Since October 2011, gold prices had been held back by a lack of progress in resolving the eurozone debt crisis, Zhang noted.
China's demand for gold jewelry fell by 9 percent to 93.8 tons in the second quarter of the year compared with one year ago, with investment demand for gold falling by 4 percent to 51.1 tons during the same period, the World Gold Council said in a report on August 16.
Wang was optimistic about the market, as September and October are usually the peak season for gold in Asian countries.
Meanwhile, both Shanghai and Shenzhen stock exchanges are working with fund management firms to launch exchange traded funds (ETFs) that would enable investors to trade gold in the same way as stocks on the exchanges, which would boost China's gold demand, Wang noted.
"Gold will still be a good investment to hedge against risks in the long run, especially when the whole world is facing a financial and credit crisis," Zhang said.
However, India's Bombay Bullion Association, the country's leading trade body for gold, predicted Tuesday that the country's gold imports are likely to drop by 40 percent year-on-year to 200 tons during September and December.
Because of the slump in India, Wang predicted China would replace India as the largest gold consumer for 2012.
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