Resource News
Gold’s spike gives consumers pause
By resourceINTEL · October 7, 2009 · 6:30 am · Leave a Comment
Gold consumers across Asia greeted bullion’s run to a record high cautiously on Wednesday, with a few moving to cash in gains but the majority opting to wait for the rest of a rally they believe has only just begun.
In contrast to a second day of busy trade on global gold (GC-FT 1,042.90 3.20 0.31%) markets, the scene at shops and jewellery merchants from Sydney to Hong Kong to Mumbai was marked by a distinct lack of occasion, suggesting that the wave of retail scrap selling that greeted gold’s record run in March 2008 may not be quick to recur.
“Today’s been like any other day,” said David Carr, of KJC Coins Australia in Sydney, which deals in precious metal coins and bars. “No one’s coming in to sell gold because the price jumped overnight, it’s more wait and see, business as usual.”
The Australian outback gold mining town of Kalgoorlie, home to a nearly Times Square-sized electronic ticker tape broadcasting up-to-the-minute bullion prices, also was quiet.
“There’s nothing going on that’s out of the ordinary,” said John Horner, editor of the Kalgoorlie Miner newspaper.
Profit taking – read selling – replaced gold purchases that in New York and across Europe on Tuesday had swept spot bullion more than $10 (U.S.) above its previous March 2008 peak, and carried through on Wednesday to a record $1,048.20 an ounce.
The issue of scrap supply in the gold market – generated largely from the resale of jewellery to merchants – has taken on greater importance in recent years, as the advent of physically backed Exchange Traded Funds (ETFs) attracts new investors…read more at The Globe And Mail
