Advertisement
Gold is in demand as price drops, with Asian shoppers buying more bars and jewellery
- In China, gold jewellery sales at big urban retailers more than doubled during the Lunar New Year holiday compared with last year
- Jewellers in India see the gold momentum lasting until the auspicious gold-buying day of Akshaya Tritiya, an annual spring time festival, in May
Reading Time:2 minutes
Why you can trust SCMP
The gold price’s slump to near a nine-month low is drawing jewellery shoppers in Asia to hunt for bargains.
Advertisement
After a year of low demand, retailers are buying more of the precious metal to cater to people like Seema B, a 35-year-old housewife who ventured to Mumbai’s Zaveri Bazaar to get new bangles after months of putting it off. “The prices have come down a bit and the general worries about the virus have also eased,” she said.
Seema joins others in India and Malaysia who are stocking up for weddings and investment. Retail investors in South Korea are amassing bullion, while Chinese demand drove sales higher over the Lunar New Year. The demand for physical gold may stem the slide in prices, which have been pummelled by rising bond yields and outflows from bullion-backed exchange-traded funds.
When financial investors aren’t buying, “the physical market becomes increasingly important in setting the floor for prices”, said Suki Cooper, a precious metals analyst at Standard Chartered Bank. “The gold price floor is starting to look well cushioned.”
Spot gold dropped 0.9 per cent to US$1,729.60 an ounce on Monday. Earlier this month, its price fell below US$1,700 to the lowest since June, prompting more buying from consumers who were deterred by prices reaching a record of US$2,075.47 in August.
Advertisement
Jewellers in India see the momentum lasting until the auspicious gold-buying day of Akshaya Tritiya, an annual spring festival of the Hindu and Jain religions, in May. Kumar Jain, owner of UT Zaveri store in Mumbai, expects his sales to almost double in the January-March period from a year earlier, and is optimistic about the coming quarter, too.
Advertisement