Fall in gold price sparks local buying interest

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#1
The Straits Times
www.straitstimes.com
Published on Apr 17, 2013
Fall in gold price sparks local buying interest


By Chia Yan Min

THERE is no relief in sight for gold investors, with analysts tipping that prices are not likely to recover in the short term.

The price of gold has fallen about 12 per cent from last Wednesday, hitting US$1,382.90 an ounce at 7pm yesterday.

Gold is being dumped in response to Monday's weak growth data out of China and reports that Cyprus was planning to sell part of its bullion reserves to pay down debt, say experts.

But while many are getting out of gold, others see a buying opportunity.

Ms Beh Hsia Wa, director of bullion and futures at United Overseas Bank (UOB), the only local bank that sells physical gold, said it has seen "strong buying interest at its main branch from retail customers", with the most popular being the 1kg gold bar.

The price of a 1kg bar yesterday was $55,290.

Transaction turnover on UOB's gold savings accounts, which allow deposited cash to be converted into gold, has been about eight times higher than average over the past two days, she added.

Mr Ivan Ho, president of the Singapore Pawnbrokers' Association and owner of Heng Seng Pawnshop in Toa Payoh Central, said gold purchases have been 15 to 20 per cent higher since Monday. "Gold is likely to continue to remain relatively popular as long as the economy is less than favourable," he said.

OCBC economist Barnabas Gan said bearish sentiments have been reflected primarily in the trading of gold futures and exchange-traded funds (ETFs).

ETFs are funds tracking the price movements of an underlying asset such as a stock market index or commodity.

An example is the Singapore-listed SPDR Gold shares, which fell $4.57 to $132.10 yesterday.

Phillip Futures strategist Simon Teo said: "There is still concern that inflation may spiral out of control in developed countries as they move into unprecedented monetary easing policies... Gold prices could be supported as investors may still look to gold as a hedge against inflation."

chiaym@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
bear trap, my worst estimate for gold etf prices is a double digit number, if that were to come true what would gold prices actually be? I think a lot of people who rush in to buy now at the start of the correction could get burnt later.
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#3
how much gold is actually worth? exactly how much the next guy is willing to pay for it.
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#4
(17-04-2013, 02:10 PM)mulyc Wrote: how much gold is actually worth? exactly how much the next guy is willing to pay for it.
indeed, if gold is used as an currency insurance, then i think gold can be the world's most speculative currency.
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#5
The baseline of gold price is the extraction total cost.

Just my Diary
corylogics.blogspot.com/


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#6
After battling the crowded queue at UOB bullion counter and lug home the1kg gold bar, what can it be used for?
As a pillow, door stopper or book end?
So the baseline of gold price is = extraction total cost + utility cost for its use

The utility cost can be large if it involves emotions of feeling rich.
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#7
Emotions of feeling rich...yes I remember my colleague sharing that he bought the best investment and was biting his gold bar during a meeting 2 years ago.
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#8
(18-04-2013, 03:57 PM)a74henry Wrote: Emotions of feeling rich...yes I remember my colleague sharing that he bought the best investment and was biting his gold bar during a meeting 2 years ago.

He probably needs a visit to the dentist now! Tongue
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#9
(18-04-2013, 04:00 PM)Musicwhiz Wrote:
(18-04-2013, 03:57 PM)a74henry Wrote: Emotions of feeling rich...yes I remember my colleague sharing that he bought the best investment and was biting his gold bar during a meeting 2 years ago.

He probably needs a visit to the dentist now! Tongue

FYI, a pure gold is definitely softer than most teeth Tongue
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#10
(18-04-2013, 04:07 PM)CityFarmer Wrote:
(18-04-2013, 04:00 PM)Musicwhiz Wrote:
(18-04-2013, 03:57 PM)a74henry Wrote: Emotions of feeling rich...yes I remember my colleague sharing that he bought the best investment and was biting his gold bar during a meeting 2 years ago.

He probably needs a visit to the dentist now! Tongue

FYI, a pure gold is definitely softer than most teeth Tongue

Any marks / scratches on the Gold Bar caused by this act (biting) would very likely cause a huge drop in the valuation. The original seller / issuer would have a clause that allows them to reject (to buy back) the Gold Bar due to the 'damage'. In the worst case (if can't sell to other Gold Investors), may lose 20% to 30% as that's the value for scrap gold...Big Grin
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
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