Gold to average US$1,269/oz in 2014 - ANZ

Australia-New Zealand bank ANZ has adjusted down its near term price forecast for gold and is now expecting an average gold price of US$1,269/oz in 2014, down from a previous forecast of US$1,436/oz.

The downward review is due to a softer than expected demand response to the lower price environment and an expectation that sentiment will remain negative, ANZ said in a gold market research report.

The bank expects gold prices to improve through 2H14, with the "trough" in price to take place in the first quarter of next year when gold will decline to US$1,150/oz. The yellow metal will recover gradually to US$1,450/oz by end-2014, the bank said.

ANZ is maintaining its long term baseline gold price of US$1,450/oz.

Gold closed Friday at US$1,253/oz on the London Bullion Market, up from US$1,245.50/oz in the previous trading session, but remaining within recent ranges.

CHINESE DEMAND

Meanwhile, physical demand for gold was given a boost on the news that China's net imports of the yellow metal from Hong Kong totaled 131.19t in October, the second highest level on record. China has imported more than 100t of gold each month over the last six months and demand is expected to continue to increase in the run up to the lunar New Year at end-January 2014.

Chinese consumer demand for the metal rose 30% in the 12 months through September, and the country is likely to overtake India as the largest consumer in the world in 2013, according to the World Gold Council.