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Physical Gold Buyers Sit Out This Price Rout

Discussion in 'Trading Strategies & Systems' started by harreymartin, Jun 28, 2013.

  1. harreymartin

    harreymartin New Member

    Jun 11, 2013
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    In April, after gold dived more than USD 200 an ounce in two days, an unprecedented scramble to buy everything from coins to jewellery at "bargain" prices helped arrest the plunge, tempering fears of a prolonged rout.

    But not this time, say dealers and jewellers, who report that consumers across the world are reluctant to buy even after a price decline of almost USD 200 in 10 days as investors rushed to liquidate their gold in anticipation of the Federal Reserve's scaling back its bond-buying stimulus since November 2008.

    The failure of everyday consumers to rush to gold's rescue, as they did two months ago, suggests that prices may have much further to fall as investors rush to liquidate, analysts say.

    "The coin business is definitely a lot slower than April. They are not lining up outside of the store," Craig Sklar, owner of Ridgewood Coin & Stamp Gallery in New Jersey, said.

    Spot gold fell 2 percent to below USD 1,200 an ounce on Thursday, its lowest level since August 2010. It is now on track for a record quarterly drop of 25 percent.

    The absence of retail or collector buying likely has many causes. Many consumers stocked up on gold in April and May, when they reckoned prices were a bargain, leaving them less money or cause to buy even more this time around.

    With only two days left in the month, sales of the US Mint's American Eagle gold coins in June stand at only 47,000 ounces - one-fifth as much as in all of April, when sales hit a 3-1/2 year high. Silver Eagles sales are down 20 percent.

    Read more: http://www.daytraders.in/physical-gold-buyers-sit-out-this-price-rout/ | Also read : Checkmatetrades

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