Golden era far from over, insist consumers
By Hu Xiaocen |
June 1, 2013, Saturday
|
Print Edition
Print Edition
CHINESE consumers, looking forward five years, are optimistic about gold, despite bearish forecasts for bullion prices by analysts.
When the price plummeted in April, Chinese consumers flocked to gold retailers to pick up bargains, depleting the stocks of bars, coins and jewelry in some shops.
About 82 percent of consumers in China and India said they believe the price of gold will rise over the next five years, and 45 percent of them bought gold in the previous six months, according to the World Gold Council.
Analysts in the market, however, take a dimmer view of gold's prospects.
"The golden era for gold is over," Lim Say Boom, chief investment officer at DBS Bank, told Shanghai Daily yesterday.
"We became quite bearish on gold in March when we warned the price would go down very sharply."
Gold has declined 15 percent this year, ending a 12-year bull run.
"It looks like an asset bubble that has burst," Lim said.
Lim, a Singapore banker attending a forum in Shanghai, said gold had rallied in recent years because investors expected bad news from the eurozone, the US debt problem and a collapse in the US dollar.
Shen Junfan, a strategist at Standard Chartered Bank in Shanghai, told a media event that a strengthening dollar and a well-performing US stock market may cause investors to dump gold holdings and invest in shares.
Demand for bullion in China, the world's second-largest consumer after India, may slow in the second half of this year, Zhang Bingnan, secretary-general of the China Gold Association, said earlier this week.
When the price plummeted in April, Chinese consumers flocked to gold retailers to pick up bargains, depleting the stocks of bars, coins and jewelry in some shops.
About 82 percent of consumers in China and India said they believe the price of gold will rise over the next five years, and 45 percent of them bought gold in the previous six months, according to the World Gold Council.
Analysts in the market, however, take a dimmer view of gold's prospects.
"The golden era for gold is over," Lim Say Boom, chief investment officer at DBS Bank, told Shanghai Daily yesterday.
"We became quite bearish on gold in March when we warned the price would go down very sharply."
Gold has declined 15 percent this year, ending a 12-year bull run.
"It looks like an asset bubble that has burst," Lim said.
Lim, a Singapore banker attending a forum in Shanghai, said gold had rallied in recent years because investors expected bad news from the eurozone, the US debt problem and a collapse in the US dollar.
Shen Junfan, a strategist at Standard Chartered Bank in Shanghai, told a media event that a strengthening dollar and a well-performing US stock market may cause investors to dump gold holdings and invest in shares.
Demand for bullion in China, the world's second-largest consumer after India, may slow in the second half of this year, Zhang Bingnan, secretary-general of the China Gold Association, said earlier this week.
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