Asian Gold demand to rebound in the second half of 2016: Citi
London (July 12) Citi Research said Asian gold demand was weak in the first quarter but looks for this to improve. However, Citi expects a seasonal rebound in Asian yellow metal demand during the second half of this year.
Citi Research is upbeat on gold in the near term, listing a base case call of $1,325-an-ounce metal for the third quarter. The bank said market expectations for tightening by the Federal Reserve have died down, which tends to underpin gold. Still, Citi economists look for a potential hike in December. This might keep gold from pricing aggressively in 4Q’16 absent a sell-off in the U.S. Dollar.
Citi also said exchange-traded-fund holdings of gold, up some 100 tons per month this year, should remain robust in the near term.
The bank issued a research report listing three possible scenarios for the market, with analysts saying they are constructive on the short-term price outlook but then look for prices to moderate.