China’s December gold imports a flash in the pan

Chinese imports of gold surged in December, while India’s foreign purchases remained in the doldrums. Looking ahead, we expect high local-currency prices in India coupled with a slowdown in Chinese economic growth to curb physical demand for gold in 2020. Accordingly, we think that subdued consumer demand will be one of the factors weighing on the price of gold this year.
Alexander Kozul-Wright Commodities Economist
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Metals Data Response

Global Aluminium Production (Sep.)

Slower growth in aluminium output in September was probably linked to surging power prices. The combination of constrained output and soaring production costs will support aluminium prices in the near term and we have raised our end-2021 aluminium price forecast.

20 October 2021

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Pulling the plug; power rationing in China

Power rationing in China has raised concerns about metal supply. But perhaps less obvious is that power rationing will also negatively affect demand if manufacturing activity is curtailed. On balance, we think that the supply impact will dominate and support prices in the coming months, but we expect prices to fall back in 2022 as economic activity, particularly construction, in China continues to slow.

19 October 2021

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Dim outlook for the silver price

We think that weaker physical demand, higher real US Treasury yields and a stronger dollar will mean that the recent poor performance of the silver price is set to continue over the next couple of years.

7 October 2021

More from Alexander Kozul-Wright

Precious Metals Update

Gold jewellery demand takes a pounding

The latest trade data show sharp contractions in gold imports by major consumers China and India, suggesting that gold jewellery demand has taken a battering. Until signs emerge that the spread of COVID-19 is easing, we expect jewellery demand for gold to remain weak. However, strong safe-haven buying by investors should ensure that the price of gold rises in the near term.

9 April 2020

Precious Metals Update

Car sector woes spell bad news for PGMs

As growing numbers of car companies idle production in response to COVID-19, we suspect that platinum group metals (PGM) demand will slow to a crawl. What’s more, job losses and income cuts due to lockdowns will curb car sales long after containment measures are lifted. Given their extensive use in auto parts, we think that palladium and platinum will be oversupplied in 2020.

6 April 2020

Precious Metals Update

Deflationary fears a bad omen for gold

Fire sales of gold have seemingly given way to safe-haven buying following yesterday’s unprecedented intervention by the Federal Reserve. Providing the Fed has injected sufficient liquidity to defend against a further collapse in equity prices, we expect the gold price to tread water. That said, the possibility of a deflationary cycle poses a major downside risk to our forecast.

24 March 2020
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