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Risk brews as gold price soars to record high
By Zhang Fengming |
October 28, 2010, Thursday
|
Online Edition
Online Edition
GOLD is expected to hit a record US$1,400 an ounce next year but investors should refrain from chasing the ride as risks mount, analysts said today.
"We're still positive on gold's performance and expect it to hit a new high next year as a weak dollar supports the precious metal to glitter further," said David Leung, general manager of wealth management of Standard Chartered Bank. "However, investors should be really cautious on buying at the current high prices."
Short-term fluctuation and profit-taking are likely and investment opportunities may come once gold dropped below US$1,300, say around US$1,230 to US$1,250 an ounce, he added.
"We don't think there are as many investment opportunities in gold as in China's stock market at this stage," Leung said.
Gold investment, including gold bars, coins and paper gold are getting popular among Chinese investors as alternative investment.
Lu Zhengwei, an Industrial Bank senior economist, said there're more fluctuations likely in the short term before the precious metal rise to a new high.
Gold rose to a record US$1,386 an ounce earlier this month as investors are jittery about a new quantitative measure from the Federal Reserve to bolster a faltering US economy.
The Fed is set to post its next-step policy next week.
The appetite for gold as an investment in China surged 157 percent to 37.7 tons in the second quarter of this year, said the World Gold Council.
In the same period, total retail gold demand jumped 29 percent to 120 tons.
Although jewelry accounts for the lion's share of sales, demand for gold as an investment is picking up rapidly. It wasn't until the last six years that individuals woke up to the idea of gold as an investment instrument, and now that segment continues to increase at a rapid clip.
"We're still positive on gold's performance and expect it to hit a new high next year as a weak dollar supports the precious metal to glitter further," said David Leung, general manager of wealth management of Standard Chartered Bank. "However, investors should be really cautious on buying at the current high prices."
Short-term fluctuation and profit-taking are likely and investment opportunities may come once gold dropped below US$1,300, say around US$1,230 to US$1,250 an ounce, he added.
"We don't think there are as many investment opportunities in gold as in China's stock market at this stage," Leung said.
Gold investment, including gold bars, coins and paper gold are getting popular among Chinese investors as alternative investment.
Lu Zhengwei, an Industrial Bank senior economist, said there're more fluctuations likely in the short term before the precious metal rise to a new high.
Gold rose to a record US$1,386 an ounce earlier this month as investors are jittery about a new quantitative measure from the Federal Reserve to bolster a faltering US economy.
The Fed is set to post its next-step policy next week.
The appetite for gold as an investment in China surged 157 percent to 37.7 tons in the second quarter of this year, said the World Gold Council.
In the same period, total retail gold demand jumped 29 percent to 120 tons.
Although jewelry accounts for the lion's share of sales, demand for gold as an investment is picking up rapidly. It wasn't until the last six years that individuals woke up to the idea of gold as an investment instrument, and now that segment continues to increase at a rapid clip.
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