Gold Could Rebound on H214 as Demand in Asia Increases (GLD) (IAU)
Gold is on watch Wednesday following commentary earlier that demand might soon rise again.
The WSJ cites Albert Cheng, managing director for the Far East at the World Gold Council, in saying that demand for gold in Asia is likely to pick up through the rest of 2014 as China's economy improves and investors are hoping the India will lift import curbs on the metal. Both China and India account for about 70 percent of global gold demand.
China's demand was 1,100 metric tons and India's was at 975 tons in 2013.
Cheng believes that growth in China should keep growing around 7 percent, a sustainable level for the economy.
Additionally, Cheng noted, An investigation by Chinese authorities on the use of gold to back loans of billions of dollars of potentially illegal financing is unlikely to weigh on the import demand for the precious metal by the world’s No. 1 consumer ... It is a shadow banking concern. If people have used gold as a means, it has no impact on real gold demand.
The Singapore Exchange is also moving to launch a physically-delivered gold contract in September, which should also bolster demand in Southeast Asia.
Traders are keeping an eye on SPDR Gold Trust (NYSE: GLD) and iShares Gold Trust (NYSE: IAU), among others.
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