“The sharp rise in the local equity market in China is likely to have weighed on gold demand in the past few months,” Gambarini added. “However, investors might be seeking once again the safety of gold, as recent gains in the stock market are deemed unsustainable.”
Capital Economics also projects gold demand from China and India, the two largest gold consumers, to rise by 8% and 11% year-over-year, respectively, which could help boost gold prices to $1,400 per ounce. COMEX gold futures were trading at around $1,174 per ounce.
Additionally, other market observers argue that concerns over the ongoing Greek drama may also support safe-haven gold demand as well.
“The shining metal is gaining its shine back and in the process of obliterating its biggest weekly decline since March,” Naeem Aslam, chief market analyst at AvaTrade, said in a note. “That’s’ thanks to Greece uncertainty, which is throwing a lifeline for the safe haven.”
SPDR Gold Shares
For more information on the gold market, visit our gold category.
Max Chen contributed to this article.