Asians Wait for New Signals to Buy Gold

Asian consumers expect a further decline in the Gold price and has therefore become more reluctant to buy gold. In dollar terms, the price of gold fell last week to its lowest level since March, but that caused Reuters not for a much greater interest in the yellow metal.

The fact that the relatively weak price development of gold is having an impact on the Asian gold market is also evident from the premiums. Although countries such as China, India and Singapore are also importing large amounts of gold from Switzerland this year, there is no increasing pressure on the gold market. The premiums on gold in several Asian countries were already low, but have also shown little movement in recent weeks.

Stable gold price

"Since the first quarter of this year, it has become extremely quiet. If the gold price stays within a narrow range, many people don't find it interesting to buy," so stated Ron Currie of the Australian Perth Mint. This mint not only sells coins and bars for retail investors, but also smelts large amounts of gold for the Asian business market.

The premium on gold in China, the largest gold market during the first quarter of this year, rose from less than $2.00 to $2.50 per troy ounce after Friday's price drop.

China

Due to the rise in stock prices, the Chinese have become less enthusiastic about gold. Savers and investors are lured by the high return on shares, as stock prices are already 50% higher than at the beginning of this year. This is despite the fact that the gold price in many currencies has returned to the level of the beginning of this year.

India

In the Indian market, other explanations are found for a declining demand for gold. Farmers expect a less good harvest and therefore a lower income. That means they're buying less gold. According to Reuters, two-thirds of India's gold is sold in rural areas. Also, the wedding season has ended, which means there is also less demand for the yellow metal.

According to gold expert James Steel of HSBC, the gold market could pick up again if the price drops further towards $1,150 or even $1,100 per troy ounce.

Asians wait with Buy gold due to stable gold price