- Spot gold pulls back from record high; buying robust
- India yet to make bulk purchase for wedding season
SINGAPORE (Reuters): Gold buyers rushed into Asia’s physical market on Wednesday, after prices retreated from the record high hit in the previous session, as investors maintained interest in bullion due to a shaky global growth outlook.
Spot gold tumbled 3.6 percent on Tuesday after striking a record above $1,911 an ounce. Prices rebounded as buyers picked bargains, trading up 0.7 percent to $1,841.79 by 0701 GMT. Dealers saw a flood of orders after Asia opened business on Wednesday.
“Everyone is hunting for physical gold now,” said a Singapore-based bullion dealer, adding that physical gold buying continued even when prices hit records in the past few sessions. Premium on gold bars in Singapore steadied at 40 to 80 cents an ounce above spot prices, she said. Some analysts have been warning about an overdue correction in gold prices, but the pessimistic macro environment has encouraged more investors to look into gold as an alternative investment. “People don’t trust banks, stocks or bonds,” said Dick Poon, manager of precious metals at Heraeus in Hong Kong. “They have been buying physical gold at all-time high prices, just to diversify their portfolio to include gold.” Physical silver purchase was also active, he added. Gold premium in Hong Kong held within a range of 70 cents to $1.20 an ounce, dealers said. Asia’s summer lull in the physical gold market will come to an end in the next few weeks, as India embraces its festival and wedding season starting late September and China gears towards a week-long holiday in early October that benefits gold retail business. Investors are closely watching U.S. Federal Reserve Chairman Ben Bernanke’s speech on Friday when central bankers meet for clues of further stimulus for the faltering U.S. economy.
More quantitative easing would further boost gold’s appeal as inflation concerns rose, especially as the Fed has promised to keep interest rates low for the next two years.