Gold price likely to hit US$1,400 an ounce by year-end

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KUALA LUMPUR, (Aug 6): Gold price is likely to hit US$1,400 an ounce by year-end, with stable demand amid better economic expectations, says Malaysia's largest gold jeweller. Gold price currently hovers between US$1,200 and US$1,300 an ounce.Poh Kong Holdings Bhd Executive Director Ermin D.M. Siow said the price would not slide back to this year's mid-April to mid-May level.He said one of the reasons why the sudden plunge between April and May was due to market speculation of the US Federal Reserve quantitative easing (QE) measures.Investors were cautious following US Federal Reserve Chairman Ben Benanke's statement on the tapering of the bond-buying programme in coming months."However, most analyst did not expect the QE to be implemented now and is anticipated to be enforced only when the economic situation improves."Even when the price drops, demand for physical or finished gold will still be high especially in the Asian countries," he said.He noted that during the price crash between mid-April and mid-May, the retail price for gold also fell by about 20 per cent from RM180 per gramme to RM155 per gramme. Siow said Poh Kong received more customers during last year's Hari Raya compared to this year's. "They rushed to our stores after fasting and prayer time and that made us to close our shops a bit late. "Frankly speaking, we have not yet seen people coming to our outlets to buy gold and jewellery for this year's Hari Raya. "We assume that most people bought gold and jewellery during the price crash period in mid-April and mid-May," he said.Siow, however, said gold and jewellery retailers in Malaysia were fortunate as there would always be demand for gold and jewellery throughout the year even though the gold price was uncertain."We have festivals throughout the year and luckily we have many ethnic groups in Malaysia who love gold."The Malays love gold. the Chinese like gold. the Indians crave for gold. If the Malays do not buy, the Chinese will. If the Chinese shy away, the Indians will do. So, in Malaysia, we are very lucky," Siow added. On gold customers in Malaysia, Siow said there were two types of customers who buy gold -- people who want to wear the gold and gemsets and people who want to keep the jewellery for future investments or to be given as a gift.Poh Kong also sells gold wafers to people who want to keep gold for investments or as a gift. "We have various weights for gold wafers such as one gramme, five grammes, 10 grammes and 50 grammes, which depends on the customers’ budget," he added.Poh Kong, the largest jewellery retailer in Malaysia, currently has 105 outlets in Peninsular Malaysia and aims to expand to Sabah and Sarawak over the next two to five years.