Business slow in Asia's physical gold market

SINGAPORE Fri Nov 23, 2012 1:00pm IST

Gold biscuits are displayed inside a jewellery showroom in Hyderabad April 11, 2012. REUTERS/Krishnendu Halder/Files

Gold biscuits are displayed inside a jewellery showroom in Hyderabad April 11, 2012.

Credit: Reuters/Krishnendu Halder/Files

Related Topics

SINGAPORE (Reuters) - Business was slow in Asia's physical gold market as rangebound prices dampened interest from both potential buyers and scrap sellers, defying expectations of a pickup in demand during the holiday season, dealers said on Friday.

Analysts and traders had expected demand to strengthen on higher purchases of jewellery and other products during the holiday season in the last quarter of the year, with top consumers India and China leading the way.

"China's demand isn't on a downtrend, but it's not picking up either," said a Hong Kong-based dealer.

In the first three quarters of the year, India's consumer physical demand fell 22 percent on the year to 612 tonnes, while China's demand ticked down from a year earlier to 576.9 tonnes, the World Gold Council said.

Cash gold has been trading in a tight range around $1,730 an ounce for most the of week, after jumping above $1,700 earlier this month as U.S. President Barack Obama's re-election reassured gold bugs, who expect continuous monetary easing to boost gold's inflation hedge.

Loose monetary policy, especially that from the United States, has largely contributed to an 11 percent rise in spot gold prices so far this year.

"There is not much scrap flow, and buying is a lot slower compared to when prices were below $1,700," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Gold bar premiums in Singapore and Hong Kong were steady from a week earlier. Singapore premiums were quoted in the range of 50 to 80 cents an ounce above London prices, while in Hong Kong premiums were $0.50-1, dealers said.

WEEK AHEAD

Investors are eyeing the talks among U.S. lawmakers on the "fiscal cliff" - a $600 billion package of tax and spending changes that would kick in early next year, threatening to drag the world's top economy into another recession.

The uncertainty around how the disaster would be averted has helped support gold prices, and a failure to prevent it may attract more investors to seek safety in bullion.

(Editing by Himani Sarkar)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage