Wold Gold Council Predicts Demand Rise As Price Dips

The World Gold Council is predicting a rise in gold demand, particularly for jewelry, because the price has come off its highs. Jewelry demand was hit by two factors: the global recession and higher prices as investors flooded in to the metal. The latter seems to be leveling off, and the former should pick up due to global recovery.

However, recovery of the jewellery industry and increased demand certainly doesn't mean that investment is forecasted to fall. In fact, as some analysts predict a continued rise in the price of gold throughout the year and global currencies continue to be inconsistent, investment in the precious metal is almost certain to continue.

Given this forecast, gold should remain in a trading range. A move to new peaks, in U.S. dollar terms, would choke off that increase in jewelry demand - although it may be supplanted by a further rise in investment demand.