Asia Gold buyers hunt for pre-Lunar New Year deals on price drop
Weaker gold prices at the beginning of 2013 sparked buying in Asia's physical bullion market as customers prepared for upcoming Lunar New Year holiday demand.
After logging its twelfth straight annual price increase last year, gold dropped below $1,626 an ounce to a more than four-month low in the first week of January on signs the Federal Reserve may be rethinking its stimulative money policy. Prices have since recovered to around $1,660 an ounce on Monday. "Gold prices have gone down a lot since December and we are seeing very good physical demand from India, China and Southeast Asia," said a Singapore-based trader.
Supply remained tight as refineries rushed to deliver orders to customers after reopening in the new year, he added.
Gold premiums in Singapore stood at $1 to $1.20 an ounce above London prices, slightly higher than the end of December. In Hong Kong, gold premiums were quoted in the range of $1 to $1.50 an ounce, dealers said.
"As we are close to the Lunar New Year, demand in the region is picking up, although the buying is not as strong as in the past few years," said Dick Poon, general manager of Heraeus Metals Hong Kong Ltd.
Poon expected demand to peak in the third or fourth week of January, before Lunar New Year celebrations kick off in early February. The festival is a peak period for retail gold businesses in China and other countries in the region.
Traders also reported strong buying interest from India, which is vying with China to
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