Weak dollar, stocks to drive gold demand
Dubai |By Saifur Rahman, Staff Reporter | 13-08-2003
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A weak U.S. dollar and nearly flat equity and property market could drive the price of gold to nearly $400 by the end of the current year, said a gold market specialist during the launch of the Arabic version of the Gold Survey by Dubai Metals and Commodities Centre (DMCC).
"External factors, economic and political, will continue to favour de-hedging and investment over the rest of 2003 while fabrication demand is price-sensitive and could, along with the supply from scrap, limit the upside," said Tim Spencer, metals analyst at the UK-based Gold Fields Mineral Services (GFMS).
"Gold prices will move higher from the current levels subject to further growth in investment demand, continuation of the historically high level of net long positions, continued producer de-hedging and steady fabrication demand."
Last year, he said, the Middle East accounted for 511 metric tonnes or less than 20 per cent of the world gold consumption.
Gold fabrication in the UAE accounted for about 47.5 metric tonnes last year, mostly by Dubai.
"Fabrication demand in Middle East jewellery fell by 10 per cent whilst bar hoarding rose by 21 per cent from 20 to 25 tonnes," he said.
"Globally, mine production went down by 1.4 per cent to 2,587 tonnes last year against 2,623 tonnes in 2001. Total demand increased by 1.5 per cent to 3,978 tonnes last year against 3,920 tonnes in 2001. This trend might continue this year as well."
DMCC earlier acquired the exclusive rights to publish the annual Arabic Gold Survey from GFMS and will distribute 2,000 copies to DMCC members, clients and partners. This important industry publication is now being printed in five languages - Arabic, English, Chinese, Japanese and Russian.
Tawfique Abdullah, DMCC chief executive, said: "The development of the Arabic Gold Survey demonstrates DMCC's ongoing commitment to raise the information benchmark amongst gold and precious metals professionals." |
