Gold Rises Amid Haven Demand, Chinese Consumers' Buy

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Bloomberg Apr 14 23:48 · 69.3k Views

Gold is trading higher. Iran’s attack on Israel over the weekend is driving demand for haven assets. The precious metal has surged by almost 20% since mid-February amid robust buying by central banks and increased demand from Chinese consumers. Sybilla Gross reports on Bloomberg Television.

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Transcript

  • 00:00 The The Haven reaction is pretty textbook what we've seen
  • 00:03 as the drivers for the rally until this weekend.
  • 00:06 Perhaps a little bit more confusing.
  • 00:10 Yeah, definitely Heidi.
  • 00:11 I think everyone's scratching their head over gold at the moment because
  • 00:14 really gold is flying in the face of what we know
  • 00:18 of
  • 00:19 when it it should perform well really with expectations for rate cuts.
  • 00:23 And they've just been pushed back
  • 00:25 after a series of really strong
  • 00:27 economic data out of the
  • 00:29 US
  • 00:30 Look, one factor we really can't ignore in the gold story at the moment is China.
  • 00:35 We've seen just persistently strong demand
  • 00:39 from both, you know, local investors and also the central bank buying up huge volumes of gold.
  • 00:45 And it's, it's kind of a weird
  • 00:48 reversal in the trend so to speak because typically
  • 00:52 China has been
  • 00:54 a sector where when prices drop that's when demand rises.
  • 00:58 But if anything prices are,
  • 01:00 you know the the Shanghai premiums trading at elevated levels and we're not seeing any drop off in demand there.
  • 01:06 And we know
  • 01:07 China is the biggest consumer of gold.
  • 01:09 So that really can't be ignored
  • 01:11 in the whole
  • 01:12 gold mystery rally
  • 01:14 story at the moment.
  • 01:17 And and you can really see that enthusiasm
  • 01:20 for for Chinese gold to mine in particular when you take a look at some of their gold ETFs
  • 01:25 and they're trading at a big premium to net asset values.
  • 01:28 So
  • 01:29 are we likely to see a further run up from this point in time
  • 01:34 When it comes to China, it's hard.
  • 01:37 I mean, who knows what will happen, but it's hard to see
  • 01:40 or imagine a situation where given the
  • 01:43 the state of the property sector and
  • 01:45 the
  • 01:45 equity sector
  • 01:47 in that market, it's hard to see.
  • 01:48 Imagine a situation where
  • 01:50 investors are going to turn off gold suddenly,
  • 01:54 more broadly.
  • 01:55 What that means for the spot price, it's hard to say.
  • 01:57 We have seen in recent weeks a number of banks upgrade their
  • 02:01 price forecast for gold this year to
  • 02:03 seeing
  • 02:04 $2500 an ounce being thrown around quite a bit.
  • 02:09 Whether that will happen in the near term or a little bit further down the track, it's hard to say.