Nervous investors around the world stampede to the precious metal in the face of continuing financial volatility.
16:58, UK, Monday 15 February 2016
With financial markets having suffered the worst start to a year on record, Monday's rallying of European and Asian markets will be cautiously welcomed.
But caution is the operative word here.The turmoil of 2016 so far has seen investors around the world desperately seeking out safe assets.
:: FTSE Opens Higher As Asian Stocks Soar
With its reputation as the world's ultimate safe haven, that has meant a stampede into gold.
The price of the precious metal has soared in recent weeks as markets have tumbled.
And with volatility expected to continue in the coming weeks, amid concerns about oil prices, slowing Chinese economic growth and about negative borrowing costs, interest in gold is expected to remain strong for some time.
Last Thursday gold bullion saw its biggest gains since the 2008 financial crash.
As markets bounced back a little on Monday, the metal saw its first significant fall of 2016, but in Bangkok's Chinatown, bargain hunters were quick to act.
Piling into the gold trader stalls to pick up necklaces, bracelets and ingots - many were calculating further increases were on the way.
"Now is the time to buy. I chose this time to buy the gold at this price," said civil servant Sathit Siricharoen, as he emerged from one gold merchant.
When asked whether he was banking on the price going up again he said: "Maybe. Yes, I think so."
He was not the only one predicting more uncertainty on the horizon.
Jitti Tangithpakdi, chairman of the Thai Gold Traders Association, said: "Today is the first day since the New Year that the price of gold dropped a lot.
"But I think the price will continue to swing - the US Federal Reserve's considerations about whether or not to adjust interest rates will fuel this fluctuation.
"So this is a good opportunity for investors to take a profit."
Across town, in the trading room of YLG Bullion, Thailand's biggest gold import and export business, trading was brisk.
They had expected nothing less after the Chinese New Year, and ahead of the upcoming Indian wedding season - two calendar events that annually push gold up.
With Asia accounting for 60% of global gold demand, the owner of YLG Bullion, Pawan Nawawattanasub, said it was important to realise the metal is more than just a safe haven.
"I think Asian people look at gold differently to European or American people - they look at it as wealth - if you can buy some gold, buy some gold, if you can grab some profit, then make some profit," she said.
But there's no doubting those profits are likely to be higher if recent western economic anxieties grow.
"If there is more volatility, people will come in more...then it's boom, like in the last few weeks, everybody will be jumping back," Ms Nawawattanasub added.
0 comments:
Post a Comment