China demand may rescue Asia gold market<\/p>\n
TOKYO (Reuters): Asian demand for gold has been lackluster
\nthis year as slowing economies have hurt jewelry offtake and
\nindustrial use, although China may revive the market as it
\nliberalizes the domestic gold trade, analysts said on Tuesday.<\/p>\n
Gold demand in 10 countries in east and southeast Asia for
\ncalendar 2001 will likely exceed last year's 815 tons because an
\nexpected rise in Chinese demand will offset declines elsewhere,
\nsaid Itsuo Toshima, a regional director of the gold mining body,
\nthe World Gold Council (WGC).<\/p>\n
\"It's too early to project how big Chinese gold demand will
\nbe. But I expect their demand to expand because China will likely
\nstart implementing programs to liberalizing its gold market by
\nthe end of the year,\" Toshima said in an interview.<\/p>\n
The Council, a gold promotion organization funded by major
\nmining companies, has acted as an adviser to China over its gold
\nmarket reform and has proposed deregulation steps to the
\ngovernment, including allowing individuals to buy gold investment
\nproducts.<\/p>\n
It estimates Chinese gold demand reached 207.5 tons in
\ncalendar 2000, up from 205 tons in 1999.<\/p>\n
Toshima said China's gold demand could grow to 800 tons in the
\nnext 10 years if its market is liberalized, just like India's
\ngold demand has quadrupled to over 800 tons since the country
\nderegulated its gold market in early 1990s.<\/p>\n
At present, all gold produced in China must be sold to the
\ncentral People's Bank of China. Individuals are banned from gold
\ninvestment.<\/p>\n
Traders agree China has the potential to contribute to Asian
\ndemand this year, although they were doubtful about growth in
\nother markets.<\/p>\n
In Japan, gold demand for calendar 2001 is expected to shrink
\nfrom some 200 tons estimated for last year because consumers are
\nreducing spending on luxury goods such as jewelry amid economic
\ngloom, traders said.<\/p>\n
Use of gold by Japan's semiconductor makers was also declining
\nas manufacturers curb production in the face of slowing sales and
\nrising inventories.<\/p>\n
\"I'm afraid Japanese gold demand this year might slip by 10-20
\npercent from last year,\" one Japanese trader said.<\/p>\n
Latest data from Japan's Finance Ministry shows imports in the
\nJanuary-March quarter of this year totaled 6.82 tons, down from
\n12.54 tons a year earlier.<\/p>\n
Demand for gold bars and other investment tools has been poor
\nthis year as Japan grapples with deflation, which has reduced the
\nneed for gold -- traditionally a hedge against inflation.<\/p>\n
\"In recent months, fresh buying of gold bars was overwhelmed
\nby profit-taking,\" another Japanese trader said. Holders of gold
\nbars were taking advantage of the yen's weaker trend against the
\ndollar, which contributed to higher yen-denominated gold prices.<\/p>\n
Traders said the latest rally in world gold prices had
\naccelerated sales of gold bars by Japanese investors.<\/p>\n
\"U.S. funds were said to be shifting funds to gold from the
\nequity and debt markets. But as far as Japan is concerned, I
\ndon't believe such safe-haven buys have occurred,\" another
\nJapanese trader said.<\/p>\n
But Japanese investors may turn from net sellers to net buyers
\nof gold bars if they regain confidence about the upside potential
\nfor prices, he said.<\/p>\n
\"World gold prices appear to have bottomed out and may have
\nentered an uptrend. Investors may return as buyers,\" he said.<\/p>\n
Gold was fixed at $291.25 an ounce in London on Monday, its
\nhighest since June 13, 2000. It was a bounce after hitting a
\n$253.75 spot low in February.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/china-demand-may-rescue-asia-gold-market-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}