Bank of America (NYSE: BAC) analysts said on Monday that China may be a primary driver of gold demand during the next several years, citing China’s growing jewelry market and new interest in investing in the precious metal in the developing country.
“Along with the liberalization of the jewelry market, the (Chinese) government also focused on opening up the investment sector, allowing investment in gold,” Bank of America analysts said in a report.
“China’s gold jewelry demand and retail investment will stay healthy in the coming years, which should provide continued support to the global gold market.”
Gold has recently hit a three-week low after prices fell below key moving averages. Some analysts believe that the drop is a temporary correction. Despite the recent decline in gold prices, Bank of America set a medium-term price target for gold of $1,500 per ounce. Gold has recently been trading between $1,000 and $1,100 per ounce.
