Gold Price Volatility to Undermine Demand: World Gold Council

SEATTLE (Scrap Monster): The World Gold Council (WGC) foresees ongoing volatility in gold prices to continue, as tensions between the U.S. and Iran escalate further. The increasing volatility will dent the consumer demand for the yellow metal. Incidentally, domestic gold prices in India had recently hit record levels.

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According to Somasundaram PR, MD-India, WGC, the volatility in gold prices are likely to continue with an upward bias. The lack of participation by consumers is likely to hit jewellery industry, he said. He shared the general impression that volatility is likely to continue in 2020, mainly on account of worsening U.S.- Mideast ties and the upcoming U.S. Presidential election. The U.S.- China trade dispute may add further volatility to gold prices, Somasundaram added.

Meantime, WGC believes that the geopolitical tensions in the Middle East region are more or less factored in gold prices now. The market is likely to move on until some new development. However, the volatility will act as a headwind to consumer demand in 2020, it said.

The higher prices of gold will lead to consumers demanding more surety on the purity of jewellery purchased. Incidentally, the country had recently made hallmarking mandatory for gold jewellery.