By Polina Devitt
       LONDON, June 6 (Reuters) - Gold prices are expected to
hit another record high this year despite a dip in physical
demand, consultancy Metals Focus said, as interest rate cuts
arrive against a backdrop of U.S.-China tensions and conflict in
Ukraine and the Middle East.
    Demand for gold will likely slip 2% to 4,639 metric tons
this year, with lower jewellery fabrication, declining net
physical investment and reduced central bank appetite, Metals
Focus said in its annual report on Thursday.  
    Safe-haven demand driven by geopolitical and economic
uncertainty as well as persistent central bank buying
contributed to a rally in gold from March to May, taking spot
prices to a record $2,449.89 per ounce on May 20.
    "Although there are downside risks in the near term, we are
confident that prices will see a new record before the end of
the year and average $2,250 for the full year, marking another
annual average record," Metals Focus said.
    Sentiment towards gold is supported by fears over U.S.
government debt, the anticipated arrival of rate cuts, elevated
geopolitical tensions and economic uncertainties, it said.
    From the point of view of fundamentals, demand from central
banks remains significantly higher than pre-2022 when they sped
up purchases to diversify foreign currency reserves, providing
further support to the price.    
    "Near-term (price) corrections are likely, as tactical
players take profits or are perhaps triggered by liquidations in
equities," Metals Focus said. 
    "The downside however should be limited, as there are still
investors sitting on the sidelines waiting for opportunities to
enter the market."
    Meanwhile gold supply, according to the consultancy, will
likely rise by 3% to 5,083 tons this year, with mine production
and recycling both higher.
    Following are Metals Focus's gold supply and demand numbers,
in metric tons:    
                              2022   2023  2024F  Change  Change
                                                   23/22   24/23
 SUPPLY                                                         
 Mine production             3,634  3,646  3,749    0.3%      3%
 Recycling                   1,140  1,239  1,299      9%      5%
 Net hedging supply              -     59     35     n/a    -40%
 Total supply                4,774  4,945  5,083      4%      3%
                                                                
 DEMAND                                                         
 Jewellery fabrication       2,196  2,194  2,141   -0.1%     -2%
 Industrial demand             315    305    328     -3%      7%
 Net physical investment     1,213  1,203  1,170     -1%     -3%
 Net official sector buying  1,082  1,030  1,000     -5%     -3%
 Total demand                4,815  4,732  4,639     -2%     -2%
                                                                
 Market balance                -41    212    444                
                                                                
 Net investment in ETPs       -110   -244   -150                
 Market balance less ETPs       68    456    594                
 Gold price ($/oz)           1,800  1,941  2,250      8%     16%
 
    
 (Reporting by Polina Devitt; Editing by Jan Harvey)