Poh Kong sees gold prices hitting US$1,900 by year-end

Source from (The Sun Daily): http://www.thesundaily.my/news/494749

Published: September 20, 2012
Kang Siew Li
sunbiz@thesundaily.com

PETALING JAYA (Sept 19, 2012): Poh Kong Holdings Bhd, which is expecting another record year of results in the current financial year ending July 31, 2012 (FY12), said global gold prices might go as high as US$1,900 per ounce by the end of the year, as debt woes in the US and Europe continue to spur demand for the safe-haven investment.

Its executive director Ermin Siow said industry analysts are predicting that the precious metal would be trading in the range of US$1,560 to US$1,920 per ounce this year. The price is currently hovering at US$1,770 an ounce.

The jeweller believes that gold price will hold firm until 2015 on the back of the US Federal Reserve's recent announcement that it would probably keep interest rates at record lows until at least mid-2015, which could put off investment in fixed-term deposits and savings accounts and boost demand for gold.

"It will never return to the US$300 to US$400 per ounce price levels in the 1980s. (In fact,) I expect the gold price to exceed US$2,000 an ounce next year," Siow said when giving the media an overview of gold demand trends here today.

Poh Kong expects its net profit and revenue for FY12 to grow between 20% and 25%, from RM41.6 million and RM692.5 million respectively in FY11, driven by a rise in gold prices, new outlets and higher sales from existing stores.

"In fact, our net profit for the three quarters of FY12 has already exceeded the total net profit achieved for the last financial year," said Siow. The group posted a net profit of RM41.7 million on revenue of RM625.4 million for the nine months ended April 30, 2012.

The group now has 101 outlets in the country, and is due to open one more by year-end. Gold jewellery contributes some 80% to Poh Kong's total revenue, and gems the balance.