Investors see gold prices continuing to fall

Business

oi-Sunil

By Sunil Fernandes

Published: Friday, May 17, 2013, 10:45 [IST]

Investors are not too bullish on the price of gold rising, despite the recent drop. Credit Suisse Group AG conducted a poll on the price of gold and the response of the participants gleamed that the commodity has the worst outlook for the coming 12 month period with prices prevailing below the $1400 mark, according to a Bloomberg report.

At least 60% of participants predicted that the bullion would remain in doldrums. 51% of respondents said gold will trade below $1,400 in 12 months.
"Bearishness for gold was a very clear consensus," said Kamal Naqvi, the head of commodities sales for Europe, Middle East and Africa at Credit Suisse to Bloomberg, according to a news report by the latter.
A few days earlier noted investment bank Societe Generale reiterated its bearish call on gold, recommending that investors sell the precious metal as it heads towards $1,500

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund (ETF), said its holdings fell 0.24 percent to 1051.65 tonnes last week. According to a Reuters report the holdings were within sight of a four-year low.

Indian gold prices track international gold price movements, and calls on international gold is bearish at the moment. This is despite the fact that in the first quarter the demand for gold coins and gold bars jumped 52 per cent in India.

"Demand for gold in China and India was also driven by an increase in bar and coin sales - up 22% year-on-year in China and 52% in India. In the US demand for bars and coins was up 43% compared with the same quarter in 2012. Globally, bar investment was up 8% while official coins (such as American Eagles and Canadian Maple Leafs) were up 18%. Gold held by gold-backed ETFs, which in 2012 accounted for 6% of the world's gold demand, fell by 177t," the World Gold Council said in a release on Thursday.

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