Indian gold jewellers rushed to replenish stocks ahead of religious festivals and other physical buyers in Asia snapped up bullion after prices fell to their weakest in more than a month, dealers said on Wednesday.
Steady physical demand led to supply tightness, pushing up premiums for gold bars in bullion trading centres of Singapore and Hong Kong. Dealers also saw purchases from consumers in China, Thailand and Indonesia. Gold added $2.00 an ounce to $1,193.50 after falling to a low of $1,189.30 on Tuesday -- its lowest since May 25.
The metal is more than 5 percent below a lifetime high above $1,264 struck in late June, when worries the euro debt crisis was spreading spurred buying from investors.
Gold buying in main consumer India resurfaced after a gap of nearly a month as dealers stocked for a second round of religious festivals starting in August, when demand for bullion picks up and the wedding season starts.
"The initial reaction for the dip was good but they are looking for more correction. I may have imported about a tonne since 3-4 days," said Pinakin Vyas, assistant vice-president-treasury with IndusInd Bank (INDUSINDB.NS : 213.4 +3.25), a gold importer.
Jewellery is the most common gift during religious events and weddings in India.
"They don't want to miss this chance of a dip before festivals. I placed indents to import half-a-tonne of gold over the past 3 days," said a senior official with a state-run bullion dealing bank, which imported about 40 tonnes last fiscal year.
In Singapore, premiums for gold bars edged up to 70 U.S. cents to the spot London prices from 60 cents last week, with dealers struggling to cope with inquires from consumers in Southeast Asia.
"I am not surprised to see the market short of physicals after the demand surged overnight. Those who did not place their orders earlier will lose out," said a dealer in Singapore.
"Hot physical demand continues to pick up from Indonesia and Thailand," he added.
As investors booked profits after sending gold prices to a record last month, purchases from Chinese jewellers stirred up trading in Hong Kong. Dealers offered gold bars at premiums of 80 cents, up from 50 cents last week.
"China buys a little bit. You can say there's a little of buying everywhere," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"There's no sale of scrap. There is selling from investors. Some people are liquidating their positions a little bit," said Leung, referring to declines in ETF holdings.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 1,316.481 tonnes by July 6 from 1,318.915 on July 2. The holdings hit a record at 1,320.436 tonnes on June 29.
Source : Yahoo Finance
Photo : topnews.in
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