Seasonal Asian Demand To The Rescue For Gold Despite potential December Rate hikes –RBC Capital

Singapore (Nov 2)  Despite the perception of a potential U.S. rate hike in December, analysts at RBC Capital Markets expect robust Asian demand to support the gold price for the rest of the year. “This week, we highlight Chinese gold imports via Hong Kong, which hit a high for the year at 110 tonnes in September,” they say in the bank’s Precious Metals & Minerals Weekly Valuation Tables report Monday. “We believe this increase in Chinese demand is driven by restocking purchases in advance of the Chinese New Year season, volatility in Chinese equity markets, and a devaluation of the yuan in August, which may have prompted a move by investors seeking safe haven into gold,” they add. Despite strong demand out of China, Indian demand for September was down, however, the analysts expect Q4 demand from India to be “seasonally strong.” “We believe that gold should be supported by strong seasonal Asian demand through Q4, with the Indian wedding and festival season and ahead of the Chinese New Year,” they note. “This may be offset by the uncertainty surrounding a potential Fed rate hike in December, which continues to be the main focus. We believe that a rate hike may be priced in around the $1,125 - $1,150 level, while a delay in the interest rate hike into 2016 should be supportive of the gold price.”

Source: KitcoNews