Gold Bar Premiums Rise in Tokyo
Source: Reuters, Lewa Pardomuan (3/17/11)
"Gold bars were offered at zero premium to the spot London prices last week."
Demand from investors in the western part of the country also helped stir up physical trading in Japan, which is battling to prevent a nuclear catastrophe. Gold bars were offered at zero premium to London spot prices last week.
"There's a food shortage here. Airports are jammed and cargoes are disrupted. It's very difficult to import metal from overseas, so Japanese premiums are a bit higher," said a bullion dealer in Tokyo.
"But there's no problem in the western side of Japan, so we've seen buying on dips from investors from that region."
Operators of Japan's quake-crippled nuclear plant again deployed military helicopters on Thursday to douse overheating reactors, as the U.S. officials warned of the rising risk of a radiation leak from spent fuel rods.
Gold dropped to stay below $1,400 Thursday as mounting fears about Japan's nuclear crisis prompted investors to sell the bullion to cover losses in other markets, but a rise in ETF holdings suggested weaker prices had spurred buying interest.
By 0341 GMT, spot gold dropped $7.95 an ounce to $1,391.35/oz.
Bullion struck a record around $1,444 last week when investors poured money on gold as oil jumped on Libyan violence and after the downgrade of Greece's credit rating reignited worries about eurozone sovereign debt.
"We've experienced a seasonal shortage before but this time around, refineries are saying they do not get enough materials back from the market to generate supply," said a dealer in Singapore.