Gold rush takes over Asia despite near-record prices

By Ashitha Shivaprasad and Brijesh Patel

SINGAPORE (Reuters) – Gold demand in Asia is rising despite prices close to record levels reached in May, industry officials say, as buyers snap up the metal to hedge against geopolitical uncertainty and economic.

Spot gold is trading at just over $2,300 an ounce, up about 12% year to date and only about 6% off the all-time high reached last month.

According to analysts, declining confidence in other investment options, such as real estate and stocks, is also a factor behind the demand for gold.

“When the macro environment returns to normal, when property and stocks are more attractive, I think price sensitivity will return,” Ruth Crowell, chief executive of the London Bullion Market Association, told Reuters.

In Japan, there are more bulls than bears on gold despite record prices, according to Bruce Ikemizu, chief director of the Japan Bullion Market Association.

Chinese investors, grappling with the devaluation of their currency, a prolonged real estate downturn and trade tensions, are also finding value in gold, experts say. Chinese purchases of gold coins and bars jumped 27% in the first quarter of this year.

“The trend in the market is that if the consumer wants to buy gold, they will. The price doesn't matter,” Albert Cheng, CEO of the Singapore Bullion Market Association, told Reuters on the sidelines of the Asia-Pacific precious metals conference.

Elsewhere in Asia, retail investors have poured money into the safe-haven asset as the metal gains acceptance among younger buyers.

In Thailand, there were queues outside gold stores whenever headlines reported a price hike, said Nuttapong Hirunyasiri, CEO of MTS Gold Group.

Vietnam is seeing investors flock to stock up, even as domestic prices trade at stubbornly high prices compared to global prices.

On the other hand, India and Australia remain sensitive to high prices.

Indian gold prices have traded at a discount to international prices for five consecutive weeks, reflecting tepid demand from the second largest bullion consumer, while sales of gold products at the Perth Mint in May have dropped 30% on a monthly basis. [GOL/AS]

India's gold imports in 2024 are expected to fall by almost a fifth, as record prices have pushed retail consumers to trade in their old jewelry for new items instead of buying new ones.

(Reporting by Ashitha Shivaprasad and Brijesh Patel in Bangalore; editing by Mark Potter)