Gold prices to consolidate lower in 2014 as investments set to recede: CPM Group

NEW DELHI (Scrap Monster): Gold analysts from New York-based research firm CPM Group said Tuesday that gold prices are expected to consolidate lower in 2014. Meantime, the research firm does not expect the gold prices to decline significantly from the current levels. Neither do they anticipate a sharp increase in gold price during the year.

According to CPM Group, gold prices are expected to average $1,256.77/oz in 2014, down 10.8% when compared with the average price of $1,409.52/oz last year. The likelihood of gold sustaining its stellar rally during January and February this year are probably less. The sharp rally in gold during the initial two months of the year has made some longer-term investors wary of more purchases. This could weigh on the price as the year progresses.

In short term, concerns about US Federal Reserve monetary policy may lead to consolidation of gold prices. The short term investors in gold are concerned about the narrowing of Fed’s monetary stimulus policy and its effects on interest rates.

The CPM Group expects the net private investment in gold to decline 30.6% year on year to 21.4 million oz in 2014, while jewelry demand is expected to rise 5.4% compared with 2013 to 82.8 million oz. Newly refined supplies, which included metal from mines and recycled gold, may drop 0.2 percent to 123.2 million ounces this year, CPM said. Fabrication may climb 4.7 percent this year, according to CPM.