China Mineral Company Analyst Predicts Gold Run For February
Amidst growing concerns about major global economies, inflation, and an increase in gold demand, China Mineral Company, LTD expects gold to reach $1400 per ounce in February.
Online, February 1, 2011 (Newswire.com) - Gold appears to be starting a run at the beginning of February. With the Chinese Spring Festival here and the Indian wedding season around the corner, consumer demand for gold is at its highest. Add in a weakening dollar, low interest rates, and unrest in Egypt and we may have the makings for a substantial gold run.
Senior analyst Greg Kelly of China Mineral Company, Ltd. out of Hong Kong predicts a surge in spot gold prices in February. "Last week I heard analysts predicting a downward trend for gold ending around $1200 per ounce, but given the current situation I just don't see that happening. With gold at $1325 I think that we will see $1400 again before we see $1300."
Demand in China and India is up. The China Gold Association announced Friday that the total use of Gold was up 20% from 2009 and that total consumption reached 510 tons in 2010. Much of this was attributed to the desire for inflation proof investments. With increasing concern over inflation in China, this number should climb in 2011 and demand should be significantly higher than 2010. Additionally, the Chinese and Indian governments are investing heavily in their gold reserves.
In the short term premiums on gold bars are at their highest since 2004. There is more demand for the precious metal than supply at the moment which is driving up the premium that must be paid for bars. Dealers are experiencing a shortage of gold bars, and orders are being placed before the gold is even refined. According to a Singaporean gold broker, "clients offered to buy gold bars at a $5 premium, but I have no gold."
It is likely that many will keep gold on hand in the near term, and with demand reaching all time highs, currency troubles, and worry over growth in major economies, it is likely that we will see a run in February and gold breaking $1400 per ounce.