Gold prices stabilise after April nose-dive
Updated: 2013-06-03 12:49
Remember the plunge of the gold price last month after massive selloffs on Wall Street. That's followed by thousands of Chinese housewives, the famously called "dama", snatched up gold products amounting to a record of 300 tons.
On Wednesday, gold edged higher, with spot gold rising around 0.4 percent to $1,385 an ounce. Does the rebound mean the shiny metal keeps its lustre among Chinese ladies?
Physical demand for the precious metal has peaked in China when gold saw its biggest daily plunge in 30 years in April.
Chinese housewives were at the forefront of a gold rush, buying gold bars and jewellery in a bid to make safe haven investments.
That was about a month ago. Now, much less visitors are bargaining for gold jewellery.
Mr Li, investment consultant in Beijing Caibai gold store, said, "After the drop in the price of gold, it is now stabilising a bit, and investors become more rational. So we see the trend of the gold price pick up in the short run. Many consumers are taking a wait and see approach."
The coastal city of Shanghai counts many century-old gold stores. Shanghai women love gold and are famous for cashing in, especially when prices are dropping.
Ms. Zhang said, "Of course it has a hedging component. If the gold price continues to fall, I may even buy some gold bullions. It can hedge when you keep it at home. It's not useful to keep cash, but you can sell the gold some day."
But the lady also says that buying gold is an investment, and any type of investment can be risky. She is not the only one who is eager to see a rebound in the price of gold.