Demand for gold seen rising in H2
Exports of Malaysian gold jewellery expected to increase due to softening price
GEORGE TOWN: The demand for gold jewellery products from Malaysia is likely to rise in the second half of the year due to softening gold prices.
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| Higher demand: A gold jewellery shop at Jalan Masjid India in Kuala Lumpur. Overseas demand for Malaysian gold jewellery is expected to rise in the second half of this year due to lower gold prices. |
Penang Goldsmith Association (PGA) chairman Joeson Khor told StarBiz that as US lawmakers had reached a deal to raise the nation's borrowing limit by US$2.1 trillion, the price of gold was likely to drop to between US$1,470 and US$1,520 per ounce over the next two weeks and in the months to come.
Gold prices were at about these levels in June.
“We expect gold prices to rebound to about US$1,700 per ounce at the end of the year, due to the continuing economic crisis in Europe, uncertainties in the Middle East, and the consequences of the US government's new debt limit.
“Investors are expected to shift their funds in commodities back to the greenback and stock market in view of the recent development,” he said.
Due to lower gold prices, the demand for gold jewellery products from Malaysia is expected to rise in the next few months.
“The demand from the Middle East is now riding strong, but it is expected to drop after the Ramadan period.
“We expect the demand from Hong Kong, Japan, and the United States to increase in the second half as gold prices soften.
“Although the prices of gold will soften, the value of gold jewellery products from Malaysia will still rise to about RM4.25bil this year, compared with RM3.8bil in 2010, as the stronger demand will offset the decline in gold prices,” Khor said.
Hong Kong is the second largest importer of gold jewellery products from Malaysia, after the United Arab Emireates, which absorbs about 90% of Malaysia's gold jewellery export.
UAE imported RM1.61bil worth of gold jewellery products for the January to May period, compared to RM1.65bil in the same period of 2010, according to the latest Malaysia External Trade Development Corp (Matrade) report.
From January to May, Hong Kong imported RM81.9mil of gold jewellery products, compared with RM23.5mil in the same period of 2010, the Matrade report said.
The report showed that the second largest importer of Malaysian gold jewellery products was Japan, which imported RM33.1mil in the first five months of 2011, compared with RM24.8mil in the same period last year.
The United States was the third largest importer, absorbing RM11mil worth of Malaysian gold jewellery products for the first five months of 2011, compared with RM10.4mil in the same period of 2010. From January to May 2011, Malaysia exported RM1.75bil worth of gold jewellery products, compared with RM1.74bil in the corresponding period of 2010, according to Matrade.
By DAVID TAN
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