Jewellery demand 'to support Gold Prices'

A Johannesburg-based fund manager has predicted that Gold Prices will be buoyed in the coming months by growing jewellery demand in Asia, Bloomberg reports.

Purchases of the yellow metal in China increased by 1.8 percent to 105.2 tonnes during the first quarter of 2009, while India is currently the world's largest consumer of gold.

Now Marcus Bachmann, who manages the Craton Capital Precious Metal Fund - which has about $140 million in assets - has explained that this trend looks set to continue.

He told the news provider: "The economic environment in Asia is improving. You can expect jewellery demand will potentially be supportive for the Gold Price."

A similar view was outlined last week by Suki Cooper, an analyst at Barclays Capital, which is the third-largest investment bank in the US.

She explained in an interview with Forbes that physical demand will surge towards the end of the summer, particularly with festivals and a wedding season coming up in Asia.

"When we get towards the end of August and September, we will see physical demand picking up ahead of Diwali and ahead of the wedding season," she told the news provider.

"Prices are more likely to gain upward momentum then."

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