The rising number of products designed to give investors easier access to gold show there has been a rise in demand in the resource, according to JPMorgan.
Ian Henderson, manager of JPM’s Natural Resources fund, says exchange traded funds (ETFs) in particular are being launched into the market in a bid to take advantage of this.
Henderson also says the Chinese government is considering relaxing laws allowing individuals to invest in gold, while other growing economies have been buying gold as a hedge against the US dollar.
“Demand [for gold] is strong,” he says.
“A total of 64% of global demand is coming from jewelry, with the majority of that from India.
“In China, the government has been relaxing laws allowing individuals to invest in, and own gold. Plus, given the weakness of the dollar, China may also be looking to switch some of its foreign reserves into gold.
“Several other growing economies have been buying gold as a hedge against the US$.”
Henderson says ETFs are playing a big part in the demand for gold.
“Investment demand has been accelerated by the creation of ETF's and was up 10% in the final quarter of last year,” he says.
“Growth has been regular and consistent. ETFs are being created in new markets to attract the investors who want diversification and easier access to gold.”
Henderson says uranium, coal and iron ore are also enjoying a bull period, in stark contrast to oil and copper.
“Pressure on the oil price has been eased by revelations that capacity and inventories are less of an issue, but the commodity remains sensitive to any news of a flare up in the Middle East," he says.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Scott Sinclair on 020 7034 2636 or email [email protected]
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