Wednesday, February 21, 2018

Next catalyst for higher gold prices could actually come from Japan rather than from China or India

As China celebrates the Lunar New Year and the transition to the Year of the Dog this week, it is another Asian economy that may actually supersede the Chinese here in 2018 when it comes to gold and gold buying.

Japan is experiencing two events over the next two years that are historically celebrated with the population buying gold.  The first is the coronation of a new Emperor, and the second is the planned Olympics that are going to be held in Tokyo in 2020.

The Year of the Dog is shaping up to be another good one for investors in gold, who may enjoy price rises of 10 per cent to 15 per cent as Japan buys up the precious metal to commemorate its new emperor and the 2020 Tokyo Olympic Game. 
Gold has already risen 10 per cent in the lunar year just ended, and as well as Japanese demand, a weak US dollar, a shift from shaky stock markets and political tensions in Europe over Brexit will keep the outlook for the commodity promising this year, analysts said. 
“According to Japanese tradition, the Japanese government will issue gold coins to celebrate the new emperor ascending the throne in 2019,” said Jasper Lo Cho-yan, a senior vice-president at iBest, part of Haitong International Securities. 
“Japan will also issue gold coins to celebrate the 2020 Olympic Games in Tokyo, and the market expects the Japanese government to start purchasing physical gold in the second half of this year to meet this demand. This will boost the gold price,” he said. – South China Morning Post
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