Gold bangles sit in a display cabinet at a jewellery store in Jakarta (file). Demand for gold jewellery and bars in Greater China , India , Indonesia and Vietnam increased to about 60% of the global total from 35% in 2004. Bloomberg / Singapore Gold will probably trade between $1,350 and $1,100 an ounce this year as increased demand from China and India , the world's biggest users, counters a reduction in Federal Reserve stimulus, according to Jeremy East , global head of metals trading at Standard Chartered . The outlook for near zero US interest rates and purchases by central banks may support bullion, East said in an interview, giving a personal view and not one on behalf of the London -based bank. The predicted high for East, who moved to Hong Kong from London last year to build the company's presence, is a 9% gain from now and would boost prices to a level unseen since October. The bottom of the range would be the lowest since 2010. Gold fell 28% last year in the biggest drop since 1981 as the US recovery and surging equities prompted some investors to lose faith in the metal as a store of value. While holdings in exchange-traded products shrank 33% in 2013, demand in China probably exceeded India's for the first time as net imports from Hong Kong topped 1,000 metric tons from January to November. East's view compares with forecasts for lower prices from Goldman Sachs Group and ABN Amro Group NV. "I wouldn't be surprised if demand in China exceeds 1,000 tons again this year," said East, who's traded metals for about three decades. "While ETF selling will continue, my view is that the pace of selling will slow down," he said on January 14 . Spot gold traded at $1,238.08 in London yesterday, 2.7% higher this year. Prices touched $1,257 on January 14 on speculation that Asian demand would increase and after US payroll data missed estimates, reducing expectations that the Fed would taper stimulus. Bullion was the biggest decliner on the 24-member Standard & Poor's GSCI Commodity Index last year after corn and silver. Bullion may drop on further signs of a US recovery, Goldman Sachs said, predicting $1,050 in 12 months. Gold will end 2014 at $1,000 , according to Georgette Boele , an ABN Amro analyst, while Credit Suisse Group AG expects the metal to reach that level before the end of the year. Gold fell last year as the Fed prepared to pare stimulus, saying on December 18 that it would cut monthly bond purchases to $75bn from $85bn starting in January. Policy makers said they may hold interest rates near zero even if unemployment falls below 6.5%, the rate the central bank previously cited as a likely catalyst for an increase. Central banks turned net buyers in 2009 as countries sought to diversify their reserves. Purchases probably totalled 350 tonnes in 2013 from 534.6 tonnes a year earlier, the most since 1964, according to a forecast by the producer-funded World Gold Council . Russia , Kazakhstan and South Korea were among nations purchasing bullion in 2013. Demand for gold jewellery and bars in Greater China , India , Indonesia and Vietnam increased to about 60% of the global total from 35% in 2004, HSBC Holdings said in an October 18 report. Demand in China expanded 30% to 996.3 tonnes in the 12 months to September, data from London -based WGC show. WGC, which said November 14 bullion was flowing from west to east, groups China , Hong Kong and Taiwan under Greater China . "We've seen a significant logistic bottleneck as gold from ETFs is being refined in the west into kilo-bars to be sold to the east," said East, referring to the size of bars that are popular among Asian buyers. Bullion suitable for good delivery in London is generally close to 400 ounces, or about 12.5 kilograms, according to the London Bullion Market Association . The premium buyers in China pay to take immediate delivery rose to $31.21 an ounce on January 7 , compared with an average of $18.72 in 2013. Standard Chartered is among the banks that have expanded in commodities, increasing hires. The bank is a member of the London Bullion Market Association and its Shanghai unit started physical-metals trade last year.
Most Popular Stories
- Obama Administration Releases Proposal to Regulate For-Profit Colleges
- Some California Cities Seeking Water Independence
- FDIC Files Lawsuit on Behalf of Banks Allegedly Hurt by Libor Scandal
- Apple, HP, Intel May Take a Hit from Slowdown in Smartphone Sales Growth
- SoCalGas Reaches Record Spend on Diversity Suppliers
- Motley Crue's Nikki Sixx Marries Model Courtney Bingham
- Chinese e-Commerce Giant Alibaba Gears for IPO in U.S.
- Will Missing Malaysian Jet Prompt Aviation System Change?
- Obama Seeks to Stay Neutral in CIA-Senate Conflict
- GM Recall Poses First Major Test for New CEO