Gold prices remain steady

12 Jun 2024 , 09:33 AM

News reports said that despite gold prices being close to their May record highs, demand for the metal is soaring in Asia as investors buy it as a hedge against political and economic unpredictability.

At just over $2,300 an ounce, spot gold is up almost 12% year to date and only 6% off the record high it reached last month.

Experts claim that a contributing element in the demand for gold is a decline in trust in alternative investment opportunities like stocks and real estate.

According to analysts, Chinese investors who are struggling with trade tensions, a lengthy real estate crisis, and currency devaluation are also finding value in gold. In the first quarter of this year, China saw a 27% increase in its purchases of gold coins and bars.

Retail investors have been flooding other Asian markets with cash for the safe-haven asset, and younger consumers are becoming more receptive to gold.

Investors are swarming to Vietnam in spite of the country’s prices continuing to trade at a stubbornly high premium to international pricing.

However, Australia and India continue to be price-sensitive.

The second-largest consumer of bullion, India, has seen lacklustre demand, as seen by the five weeks in a row that Indian gold prices have traded below international prices. In May, Perth Mint sales of gold products decreased 30% on a monthly basis.

India is predicted to import less gold in 2024—nearly a fifth less—as retail customers opt to trade in their old jewellery for new pieces rather than make new purchases due to the unprecedentedly high pricing.

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