Gold products are sold at a shop. (Photo/China News Service)
(ECNS) -- The global demand for gold is projected to increase 1.5 percent this year, led by high demand growth in China, according to a report released in Beijing on Monday.
The Global Gold Outlook 2018, published by China Gold Association, World Gold Council and precious metals consultancy Metals Focus, said gold prices will continue mild fluctuation for two to three months since a majority of fund managers still prefer the stock market.
It predicts the gold price will rise in the third quarter due to a weaker U.S. dollar, stock uncertainty and optimism about global economic growth.
Gold outperformed major asset classes in 2017 while annual average returns sat at approximately 14 percent.
Total global supply for gold in 2018 is expected to rise by 0.5 percent, while recycled gold supply will increases by 2 percent thanks to the contribution of developing countries.
Demand will also rise this year, mainly as a result of demand within China and India. China's economic growth and increasing consumer confidence are thought to be main driving forces.
Song Xin, president of China Gold Association, said in the long term more people will realize the value of gold as a hedging tool against inflation while emerging consumer demand from China's second and third-tier cities will boost the demand.