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

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

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

Telecom Sector

REUTERS SHOWCASE

Election 2014

Election 2014

Breakingviews: Singh wasn’t king, Modi could be  Full Article 

Monsoon Forecast

Monsoon Forecast

Met office rules out surplus monsoon in 2014.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

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