According to an industry report, gold prices across the globe could increase to their highest levels in four years from higher consumption by jewellers, offsetting fall in purchases by central banks. Across the globe 4,370 tonnes of gold will be consumed, the highest since 2015 and marginally higher from 2018's consumption of 4,364 tonnes, said a report by consultancy Metals Focus.
The report titled 'Gold Focus 2019' has predicted the gold prices to average $1,310 in the current financial year, higher than $1,268 in 2018 and at the highest level since 2013.
Spot gold has been trading around the $1,300 an ounce level for some time now.
The report said that the 3 percent increase in global demand to 2,351 tonnes will be driven by a rise in demand in India by 7 percent and in China by 3 percent. These two countries are the two largest gold markets in the world. It further said that the demand in the Middle East will lower.
The report has predicted that there will be a 9 percent fall in the purchases from the financial sector to 600 tonnes. In 2018, central banks' gold purchases surged by 75 percent as they diversified their reserves.
Physical investment demand is expected to remain largely unchanged from the previous year at 1,082 tonnes.
Metals Focus said that gold's supply would rise by 1 percent to 4,707 tonnes due to increased mine production and recycling and some producer hedging.
As for the market rates, gold prices are expected to rise amid a pause in the US interest rates along with political and economic uncertainty around the world but, a strong dollar would limit gains. This is because investors flock to gold, the safe haven metal during uncertainty.