| ||
| ||
| ||
 |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Korean tensions to weigh on gold
SYDNEY, Australia (CNN) -- North Korea will take over from Iraq in the months ahead as the driver of gold prices, according to a leading commodity strategist. "The end of hostilities in Iraq will be replaced by tensions in the Korean peninsula, raising bullion demand in Asia in particular," David Thurtell, Sydney-based strategist with the Commonwealth Bank of Australia, said in a commentary. Thurtell said the gold market had now wiped out all the gains of 2003, with the gold price about $13 an ounce below its starting point for the year of $345. Spot gold is trading in Asia Thursday at $331.10, after its recent peak of $388.50 on February 5. Thurtell noted that gold sold off by more than 5 percent about a week before the start of hostilities in Iraq. He warned that the tensions involving North Korea -- which angered the United States when it revealed late last year it was still pursuing a nuclear program -- had not disappeared. "The commencement of Gulf War II has just pushed them to the background," Thurtell said in his commentary. "Asian investors will be buyers (of gold) once North Korea re-emerges as an issue," he said. Asia, particularly India, is the biggest consumer market for gold, with most of India's purchases going into the jewelry trade. According to the latest statistics from the World Gold Council, India accounted for 575 tonnes of consumer demand in 2002, out of a total 3056 tonnes. China took 240 tonnes, Japan 141 tonnes and Southeast Asia 255 tonnes. The WGC statistics show that total world demand for gold in 2002, including dental and industrial gold, was 3415 tonnes. Over the next three months, Thurtell said the price of gold should hold at $315 an ounce with periodic spikes back up to $350 on "ongoing geopolitical jitters." For the longer term, from three to 12 months, Thurtell said a weaker U.S. dollar, ample liquidity in the monetary system and concerns about terrorism would likely maintain investor demand for gold. He said better economic growth and restored consumer confidence in the second half of 2003 should also assist jewelry demand. On the supply side, the prospect of sluggish mine output in the next few years would likely support the price of gold. Thurtell sees gold trading in a range of $315 to $400 over the next 12 months.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
