Jewellers shop around as gold price drops
SINGAPORE/MUMBAI (Reuters) - Jewellers and investors flocked to the physical market on Wednesday after bullion prices slipped from an all-time high around $1,430 an ounce because of a firmer U.S. dollar, keeping premiums steady in Asia.
But trading slowed to a trickle in top consumer India as domestic prices held near record levels given the ongoing wedding season.
Gold fell $8.94 an ounce to $1,391.92 an ounce in volatile trade. It had rallied to a lifetime high at $1,430.95 on Tuesday before falling more than 1 percent on technical selling.
"It's been a crazy run-up in prices, and who'll buy at such record," said Haresh Acharya, head of bullion desk with an Ahmedabad-based wholesaler, Parker Agrochem. "Buying will slow further on every new record."
India is in the middle of the wedding season, which will end in December after the Dhanteras and Diwali festivals in early November. In India, which accounts for 20 percent of global demand for jewellery, gold is widely gifted in religious celebrations and weddings.
"Demand has vanished away after good festivals as traders are in a wait and watch mode on record high prices," said Prithviraj Kothari, president of the Bombay Bullion Association, a trade body.
In Southeast Asia, dealers saw buying from Thailand, which kept premiums for gold bars steady at between 80 cents and $1 an ounce to the spot London prices in Singapore. .
"There's a lot of buy back from Thailand," said dealer in Singapore. "But I guess if we break key support levels, the market will just crash," he added.
Wang Tao, a Reuters market analyst for commodities and energy technicals, said gold is developing a bearish trend towards the wave "b" bottom at $1,350.27 per ounce over the next few trading sessions, and an immediate target will be $1,382.
But physical dealers said a lack of sales of gold scrap in Singapore and Hong Kong suggested that speculators were still bullish gold, waiting for prices to reach new highs again before cashing in.
Premiums were also steady at between 70 cents and $1 in Hong Kong, where dealers expected consumers to buy on dips in coming weeks.
"Some investors who have sold their gold are buying back. Buying is pretty strong today, so I am sure premiums will eventually go up," said a dealer in Hong Kong.
"We don't see many people selling scraps. I mean, we do see some selling but there's a bit of buying too."
(Editing by Himani Sarkar)
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