By Rajendra Jadhav
PANAJI, India, Aug 22 (Reuters) - Gold prices XAU= could
rise above $1,200 an ounce in the next few months as fears of a
currency war following the devaluation of the yuan make equity
markets choppy, boosting physical gold and ETF buying, leading
industry analysts said at a conference.
The metal has already rebounded about 8 percent from July's
5-1/2 year low, boosted by minutes of the Fed's last policy
meeting that dented expectations for an imminent rise in U.S.
rates. Spot prices hit a peak of $1,168.40 on Friday.
"After the devaluation of the Chinese currency, people are
worried," said Rajan Venkatesh, head of India bullion at
ScotiaMocatta, part of Canada's Bank of Nova Scotia BNS.TO .
"They are afraid of a currency war. They are going back to
gold."
Prices could rise to $1,230 to $1,240 within a month, he
said on the sidelines of the International Gold Convention in
the city of Panaji in western Goa state.
Michael Mesaric, chief executive of the world's biggest gold
refiner, Valcambi, said deposits in gold-backed exchange-traded
funds are hovering near their lowest levels since 2008 but
current prices will attract new buying.
He expects gold prices to rise to $1,350 by mid 2016.
The recent bounce notwithstanding, gold has been under heavy
pressure this year from expectations the Fed would raise rates
for the first time in nearly a decade, lifting the opportunity
cost of holding non-yielding bullion while boosting the dollar.
But analysts like Jeffrey Rhodes, founder of Dubai-based
precious metals consultancy RPMC, said: "All the bad news for
gold is in the press".
"There is room in the world for strong dollar and strong
gold," said Rhodes, expecting higher demand in countries such as
India, China and Greece, where currencies are depreciating. "And
strong gold is an alternative to emerging market currency."
(Editing by Dominic Evans)