From the SMH:
Gold sales from Perth Mint, which refines nearly all of the nation’s bullion, have surged after prices plunged, adding to signs that the metal’s slump to a two-year low is spurring increased demand.
“The volume of business that we’re putting through is way in excess of double what we did last week,” Treasurer Nigel Moffatt said, without giving precise figures. “There’s been people running through the gate.”
Bullion plunged 14 per cent in two sessions through April 15, the most since 1983, and the commodity has entered a bear market after losing 28 per cent from its record in 2011.
The recent slump was one of the largest corrections in modern history, Deutsche Bank said. However, gold is now poised to move higher as the physical market reacts, according to HSBC.
“There’s been significant sales made as people see this as great value,” Mr Moffatt said. “Gold owners are very reactive to significant market movements.”
Gold for immediate delivery, which slumped 9.1 per cent on Monday, climbed 0.9 per cent to $US1380.33 an ounce today. Prices, which peaked at $US1921.15, dropped as low as $US1321.95 yesterday, the lowest level since January 2011.Gold’s drop has been excessive as are still a lot of troubles out there, Dominic Schnider, head of commodities research at UBS, said today, citing the potential for a weaker dollar and debt concerns.
Still, the metal may drop to the so-called marginal cost of production at $US1150 if investment demand doesn’t return, Mr Schnider said.
Meanwhile, reports of strong demand for physical gold are coming in from across the region. Physical dealers have noted a shortage in gold bars because of the demand, pushing up premiums for gold bars in Singapore and Hong Kong, Reuters said today.
As I said yesterday, I wouldn’t buy now bu there is an argument to do so.
