Gold prices have been up and down in recent months, with multiple international incidents impacting the supply and demand for the save haven. Investors who trade gold should be keeping a close eye on Ukraine and China to try and see how the precious metal will move in the coming weeks.
Gold recently declined around 2 percent, as traders participated in technical selling hoping to cash in on the previous sharp rally, according to Reuters.
“Gold was hit by profit-taking as the rally to $1,330 on Fed minutes appeared overdone,” Thomas Capalbo, precious metals trader at brokerage Newedge, told the news source. “The break below 200-day moving average and $1,300 level also triggered tons of sell-stops.”
However, investors may want to prepare for future increases in the coming years, as China’s demand for gold is expected to increase markedly. According to Bloomberg, a wealthier population should lead to a 25 percent rise in gold demand by 2017 in China.
“Whilst China faces important challenges as it seeks to sustain economic growth and liberalize its financial system, growth in personal incomes and the public’s pool of savings should support a medium-term increase in the demand for gold, in both jewelry and investment,” Albert Cheng, Far East managing director at the council, said in a statement.
This increase is expected as China recently passed India as the world’s largest gold user last year. The country accounted for around 28 percent of global usage last year. This is valuable information for investors, as increasing demand could push up prices.
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