The World Gold Council (WGC) predicted gold prices will continue to rise in 2017 as growth in Asia and political uncertainty in the west are expected to support demand.
“Not only will gold remain highly relevant as a strategic portfolio component, but also six major trends will support demand for gold throughout 2017,” the WGC wrote in its 2017 outlook report.
China and India accounted for more than half of the world’s gold demand in 2016, and, despite some short-term headwinds in both markets, will continue to drive global consumption, the council said.
In China, investment demand for gold has grown, outweighing the weakness in the jewelry sector which has suffered because of changing consumer tastes, the group noted. With investment platforms such as ETF’s growing rapidly and interest in new products continuing to rise, innovation should support China’s gold market in years to come, the council explained.
In India, the WGC expects the liquidity squeeze resulting from the government’s demonetization policy will impact gold demand in the short-term. However, by eliminating INR 500 and INR 1,000 notes from circulation, the transition to transparency and formalization of the economy will lead to stronger Indian growth in the long term, thus benefiting gold, the WGC predicted.