Gold loses sheen, but still a safe bet

Updated: 2013-04-22 03:25

By WU YIYAO in Shanghai (China Daily)

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Gold loses sheen, but still a safe bet

A senior citizen examining gold necklaces at a department store in Nanjing, capital of East China’s Jiangsu province. Many senior citizens believe that it is an opportune time to buy the yellow metal as prices have plummeted to a historical low in over 30 years. Provided to China Daily

It has been more than two weeks since Liu Chan, a gold product manager working in Shanghai, has enjoyed a quiet weekend at home. The 32-year-old gold product consultant with a Shanghai-based bank said investors' increasing passion for gold coins and bars has kept her on the phone answering inquiries from more than 20 clients a day.

A powerful trigger for their desire to buy the yellow metal is its falling price in the global market, sparking interest in a market regarded by many as a haven in troubled financial times. On April 15 gold for June delivery on the Comex division of the New York Mercantile Exchange was down $74.50 — more than 5 percent — at $1,406.90 an ounce. Its lowest point was $1,363.5 an ounce, the sharpest two-day tumble since 1983. Spot gold prices fell by more than $100 an ounce — 8.7 per cent — in a few hours on April 15 amid a rout in the metals markets.

In China, the price of gold dropped by the daily limit for two consecutive days on April 15 and 16 on the Shanghai Gold Exchange following a slump in international prices.

Gold jewelry stores in Shanghai, Beijing, Wuhan and Nanjing reported gold jewelry and bullion bulk buying. In Beijing, staff at a gold shop said customers came from all across the city and bought a combined 20 kilograms of gold within a couple of hours in just one day, according to a China Central Television report.

"It seems that investment in gold is getting popular as investors attach increasing importance to hedging risks in their portfolios and are passionate about buying when the price is dropping," said Liu.

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