Gold prices and trading volume are set to rise in the new lunar year amid geopolitical conflicts and expected interest-rate cuts, according to the head of Hong Kong’s bullion bourse, which is eyeing a bigger role in the city’s initiative to become a commodities hub.

Gold prices would test and even exceed US$3,000 per ounce (28.3 grams) in the Year of the Snake, while trading volume would grow by up to 30 per cent globally, Haywood Cheung Tak-hay, chairman of Hong Kong Gold Exchange (HKGX), said on Monday.

The price of bullion rose 35 per cent in the Year of the Dragon to HK$25,600 per tael (US$3,282 for 37.9 grams), and the international gold price hit an all-time high of US$2,790.07 per ounce in October.

Market observers forecast that gold prices will continue rising, as investors are turning to the metal as a safe haven against expected rate cuts and a gloomy economic outlook.

Formerly the Chinese Gold & Silver Exchange Society, HKGX changed from a club to a corporation late last year and began operation under its new name on January 1.