Rises in Asia as Price Drops Attract Buying From Jewelers
By Chia-Peck Wong and Debarati Roy
Sept. 20 (Bloomberg) -- Gold rose in Asia amid buying from jewelers, who are increasing their purchases after the precious metal's 8 percent decline this month.
The bullion's drop is attracting jewelers looking to build stocks before next month's Indian wedding season and the year- end holidays. Buying in Thailand isn't related to yesterday's military coup, which appeared orderly, said trader Ng Cheng Thye.
``India, Thailand, Indonesia, the whole region has been buying heavily,'' Ng, head of the precious metals market desk at Standard Bank Asia, said by phone today from Singapore.
Gold for immediate delivery rose as much as $2.1, or 0.4 percent, to $575.76 an ounce. It traded at $575.70 at 12:47 p.m. Mumbai time.
Jewelers in Thailand have been buying the bullion since gold prices fell below $600 last week, said Standard's Ng.
Thailand's currency and bonds slumped after the military yesterday seized control of Bangkok from Prime Minister Thaksin Shinawatra.
India, the largest consumer of gold, may have imported 100 metric tons of gold this month, Prithviraj Kothari, director at Riddhi Siddhi Bullion Ltd., said. ``Indian buyers have been very active at these levels.''
Global demand for gold dropped in the second quarter, the third straight decline, as higher prices deterred jewelers, the biggest buyers.
Hedge Funds
Gains may be capped by continued selling by hedge funds on rising fuel stockpiles and speculation of further declines in crude oil, said Ng. New York crude fell to a six month low of $61.55 a barrel yesterday.
``Using crude oil as a guide, the market is expecting oil to fall back to $55, so gold has the chance to go down to $550,'' he said.
Gold futures for December delivery fell as much as $4.90, or 0.8 percent, to $578.30 an ounce on the Comex division of the New York Mercantile Exchange in after-hours trade. It traded at $581.50 an ounce at 12:53 p.m. Mumbai time.
In India, the price of the metal for October delivery fell 24 rupees, or 0.3 percent, to 8,716 rupees per 10 grams, or 27,987 rupees ($606) an ounce, at 12:54 p.m. Mumbai time on the Multi Commodity Exchange of India Ltd.
