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Gold Investment Environment "To Remain Supportive in 2012"

THE GLOBAL environment for Gold Investment "is expected to remain supportive" this year, according to leading precious metals consultancy Thomson Reuters GFMS.

The ongoing Eurozone crisis – along with negative real interest rates in much of the world and fears over the value of currencies – should be positive for Gold Investment demand, the consultancy said at the launch of its Gold Survey 2011 – Update 2 this week.

The Eurozone crisis, however, may have a negative impact on Gold Prices in the short-term, it warned.

"We are conscious that the Eurozone crisis is far from over and its impact on liquidity, the value of the US Dollar and attitudes to risk could all become very apparent," said Philip Klapwijk, GFMS global head of metals analytics, speaking at the Hong Kong launch.

Gold Investment grew in value terms but fell by tonnage.

Strong growth was seen however in physical Gold Investment, with purchases of Gold Bars rising by over 33% to nearly 1200 tonnes.

The world's two largest gold markets, India and China, continued to be major sources of physical Gold Investment demand. Europe was also a major source of physical gold buying, as it has been since mid-2008.

Speaking at the London event, GFMS research director Philip Newman revealed that much of Europe's physical Gold Investment took place in German-speaking countries, with "very little" coming back onto the market.

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