Short-term Correction in Gold Price should not Mask Long-term Outlook

Commodities remained under pressure in European session with oil and gold hovering around the lowest levels in 2-3 weeks. Factoring affecting prices continue to be Chinese tightening and overhang in peripheral European countries. The World Gold Council reported that total gold demand reached 921.8 metric tons in 3Q10. It represented a -12.7% decline from the second quarter but a +12.0% increase from the same period last year. The contraction from 2Q10 was mainly due to the drop in investment demand as price has surged to elevated levels. However, jewelry consumptions remained robust and soared in both quarterly and annual basis, signaling buyers have adjusted their expectations for gold prices.

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Short-term Correction in Gold Price should not Mask Long-term Outlook