Greater interest in gold investment options as gold prices hit record highs

By Ng Puay Leng / Monica Kotwani
Published on 23rd August 2011
http://www.channelnewsasia.com/

SINGAPORE: As international gold prices hit record highs, some banks said there is greater appetite from local investors purchasing gold investment products.

Analysts predict gold prices could go as high as US$2,500 an ounce, compared to US$1,400 at the beginning of the year.

According to United Overseas Bank (UOB), more people are enquiring about and purchasing gold investment products, such as gold bars and coins. The bank has seen a 20 per cent increase in gold coin purchases compared to earlier this year.

Citybank said interest in gold investment accounts and gold-related funds has also doubled since last year.

According to the World Gold Council, the Asian appetite for gold is strong.

Analysts said demand for gold was fairly weak in the 1990s, but it has become an increasingly popular investment option in the last few years.

The sustained interest in gold as an investment option has also led to its prices being more sensitive to market movements.

Vasu Menon, Head of Content & Research with OCBC Wealth Management, said: "In the short term, its hard to make predictions where gold is headed. Gold is a very volatile asset class. Investors who want to buy gold must remember that number one, they must have the appetite for risk."

-CNA/ac