Gold demand to surge

as they continue to run large deficits.
Bulls dictate that demand for gold will surge mainly in Europe as investors fear a worsening debt crisis.
According to the World Gold Council, gold investment demand in the China and Europe mainly will gain by more than 15 percent in 2012 as investors seek haven from Europe’s problems and the prospect of weakening currencies.
China will topple India as the largest bullion market as rising incomes will bolster demand.
The bullion has been on the upward trend since 2000 and could maintain that momentum for the 12th year as European policy makers strive to avoid a break-up of the eurozone and the US weighs in with more stimulus to aid recovery.
According to market watchers, China should not go unnoticed as investors in China are faced with lacklustre equity markets and property curbs will definitely put their faith in the metal.
It’s necessary for individuals, institutions even governments to hold onto gold especially when the value of money is decreasing due to excessive printing of money or too much easing.
Some have argued that investors might turn to the dollar thereby putting pressure on gold prices, but I feel a long-term demand by China will keep supporting gold prices.
There are too many uncertainties in the global economy, politics and the financial sector that all provide for a spike in gold prices.
According to statistics, ICBC represents more than 20 percent of the turnover on the Shanghai Gold Exchange, China’s largest spot market for precious metals and more than 30 percent of the gold-leasing business in China.
Gold remains the so-called currency of last resort forecasting a rally by year-end.
China, announced its first cut in borrowing costs since 2008 on June 7 to curb property investments and avoid a bubble.
That saw gold prices jump 5,4 percent. We have seen Spanish credit rating downgraded to Baa3, a rise in Spanish bond yields affecting bond prices to the downside and borrowing costs rise to 8,5 percent all this volatility will definitely spike the bullion.
The European debt crisis is the wild card for the global market that is causing all this uneasiness for investors that will give gold the edge.
As China and other governments allow investors to buy and hold gold in recent years, investors feel gold will be best hedge going forward.
After the Greek election results on June 17, 2012 gold held steady at US$1 628,70 an ounce as it searches for the next catalyst to charge towards that US$1 630 an ounce.
Federal Reserve announcement on June 20, 2012 will definitely affect gold movement up or down.
Zimbabwean markets
Pundits have regarded Zimbabwe as a country with great potential for economic growth but is being affected by negatives coming from Government policies and regulations.
Economic analysts thus called on Government to improve its fiscal discipline and the central bank to create confidence in the banking sector and make sure Zimbabwe continues to have a healthy financial sector.