20100927
reuters

BERLIN (Reuters) - Rand Refinery, the world's largest gold refiner, has seen gold coin demand turn more fickle, but says the economic backdrop is cloudy enough to spur investor appetite for bullion, which looks set for more gains.

Howard Craig, managing director at the South African company, told Reuters on the sidelines of an industry conference on Monday that while demand for some products such as coins has tailed off from the peaks seen last year, he expected investor demand to propel the gold price higher.

A slowing in U.S. economic growth coupled with some tempering in the pace of growth in China and the impact of the European sovereign debt crisis have all added to the air of uncertainty pervading financial markets this year.

"In simple layman's terms, we're not out of the economic crisis yet. There's still some structural change that has to happen and I think the gold run is still going to continue for some time," he said, adding he foresaw the price rising to $1,500 in the next 12 to 18 months.

Craig added that output of gold coins, which soared last year, was more unpredictable and prone to peaks and troughs as the pendulum of investor risk appetite swung from one extreme to the other.

"We're down from 50,000 ounces a week to around 10- or 15,000 ounces a week. It's more volatile," he said.

DOWN AND THEN UP?

Gold, which has risen by about 18 percent so far this year, hit another record high at $1,300.00 an ounce on Monday, and has benefited from a stream of buying as investors around the world have been unnerved by the level of volatility in other asset classes such as currencies, stocks and bonds.