BIZ-WGC-DEMAND

Performance of financial markets,

monetary policy in key economies including here, and the

dollar movement will determine gold demand in 2019, the World

Gold Council said in a report Thursday.

Since gold is considered a safe haven, during choppy

markets, the demand for gold improves, normally. Emerging

markets, led by India and China--the biggest consuming

markets--make up 70 percent of consumer demand for the metal.

"We expect that many of the global dynamics seeded

over the past two years and the risks that became apparent

later in 2018 will carry over into 2019. And with them, we see

a set of trends developing that will be the key in determining

demand for gold. In turn, their interplay will be most

relevant for the short and long term price behaviour of the

yellow metal," WGC said in the report without putting a number

to the likely growth rate.

The council expects increased market uncertainty and

expansion of protectionist economic policies to make gold

attractive as a hedge while it might face some hindrances from

higher interest rates and a strong dollar. But the effects of

these factors are expected to be limited as the US Fed has

signalled a neutral stance going forward.

But as the market risks are likely to remain high,

factors like higher interest rates and a strong dollar can cap

the positive sentiment for the metal, it warned.

"Given its unequivocal link to wealth and economic

expansion, we believe gold is well poised to benefit going

forward. We also believe gold jewellery demand will strengthen

in 2019, if the sentiment is positive and increase marginally

if uncertainty remains," the report said.

Also, the marginal uptick in Western economies is

expected to result in positive consumer sentiment, the report

concluded.