Gold Premiums Highest Since 2004
Source: Reuters, Lewa Pardomuan (1/31/11)
"Everybody is snatching the available stocks."
Gold bars were quoted at a premium of $4 an ounce to the spot London prices in Hong Kong, its highest level since Reuters began compiling the data in 2004, up from $3 last week.
Physical dealers have seen a pick up in demand in recent weeks ahead of the Lunar New Year later this week and the wedding season in India in February, although any increase in cash gold prices also triggered selling from speculators.
"There's a lot of interest from India, but it's just that we can't meet their demand. Everybody is snatching the available stocks," said a dealer in Singapore. "We are seeing some light selling from Thailand, but there's also buying at lower levels."
Spot gold fell $4.45 to $1,333.85 an ounce on Monday, having posted its biggest gain in eight weeks on Friday on buying related to fears the deadly chaos in Egypt could spread throughout the Middle East.
Gold should build on last year's stellar gains in 2011 to hit record highs, boosted by low interest rates, dollar weakness and lingering worry over growth in major economies, a Reuters poll showed.
Premiums for gold bars in Singapore remained firm at $3 an ounce, also their highest since at least 2004, partly driven by demand from top consumer India ahead of the wedding season, when parents give gold jewelry to their daughters.
India's January gold imports are seen rising on softer prices and as food inflation boosts farm incomes, fuelling demand for the precious metal, a poll showed.