Gold prices seem to be ending the year in neutrality and has the Asian marketplace taking advantage of a golden opportunity. Reuters reported on Monday that gold imports from Hong Kong to China reached their highest level since February. And with the Lunar New Year approaching, analysts forecasted a surge in demand for Asia with gold being the traditional gift for the holiday celebrated on February 18th.
But the Lunar New Year isn’t the only cause for the spike in Asian gold demand. The rise in imports overlaps gold prices being their lowest in four-and-a-half-years, with Comex December gold futures dropping to 1,139.40 early last November.
Victor Thianpiriya, a commodity strategist at ANZ Bank, one of the first international banks allowed to import gold to China, recently explained in an interview that gold imports have been low in 2014 due to the large stockpile collected by China in 2013. But with most of that 2013 stock being depleted, Thianpiriya expected to see Chinese imports of gold pick up in 2015. A pick up in Chinese gold imports for 2015 should help stabilize gold prices in the market.
Thianpiriya also noted that Asian demand for gold in the near term would be virtually unaffected by lower prices. The price of gold would have to come down to as low as $1,000 an ounce before the Asian market began to buy the precious metal in large quantities, much like it did in 2013. Thianpiriya went on to say that investors are patiently awaiting the continuation of the uptrend in gold before hopping back into the market.
As of right now, Comex February gold future prices are lingering around $1,200 an ounce. Tuesday morning saw February gold trading at $1,197.20 an ounce. Steve Scacalossi, director, head of sales of global metals at TD Securities, also reported that Chinese demand is stabilizing the gold market as the year closes out and preparations are made for 2015.
