India, China weak buying may drive Gold to 1,000/Oz in 2014: BofAML

INDIA February 06 2014 5:04 PM

NEW YORK (Scrap Register): Weak physical gold buying in India and China may pull global gold prices to 1,000 an ounce this year, said Bank of America Merrill Lynch in a research note (BofAML).

According to BofAML, the likelihood of continued selling by tactical investors and a lack of physical buying in China and India are expected to pressure gold this year, possibly to $1,000 an ounce.

“If investors stopped selling gold, prices could stabilize around $1,200/oz. Yet, this is not our base case, and a more likely scenario is for investors to continue reducing their exposure. Our models suggest that this could take prices down to $1,000/oz,” said BofAML analysts, reported Platts.

“Nor will gold likely be supported by physical buying in China and India. On the traditional physical gold market, purchases from Indian and Chinese buyers will in all likelihood also not be strong enough to stop prices from falling further,” analysts added.