No gold rush even as prices near 6-year low

Some jewellers said there has been no influx of customers since Thursday's price drop, with the possible reasons being that prices of gold have been going down since mid-October and a larger drop in gold prices of more than 6 per cent had already tak
Some jewellers said there has been no influx of customers since Thursday's price drop, with the possible reasons being that prices of gold have been going down since mid-October and a larger drop in gold prices of more than 6 per cent had already taken place in July. ST PHOTO: CHEW SENG KIM

Consumers may be waiting for further drops, or have already made purchases, say retailers

Gold prices were close to a six-year low on Thursday - but customers in Singapore are not rushing to buy gold jewellery.

Jewellers and retailers told The Straits Times consumers may be waiting for prices to drop further or may have made their purchases during the larger dip in prices in July.

Bullion dealers, however, have seen an increase in demand from both local and foreign investors.

Gold prices at jewellers start from about $46 a gram now. During the same period last year, gold cost up to about $55 a gram. A necklace can weigh 20g or more.

Prices fell amid expectations that the United States Federal Reserve will raise interest rates soon. A stronger US dollar makes dollar-denominated gold more expensive for holders of other currencies.

While jewellers such as Jewel Palace report that business has gone up by about 5 per cent to 10 per cent since Thursday, others report mixed responses from customers.

"People may be waiting for prices to drop further before buying," said Mr Kavivarasa V., senior sales manager at Kamala Jewellers, who added that there has been no influx of customers since Thursday's price drop. "But we expect more to come during the weekend. Usually, business increases between 20 per cent and 30 per cent during the year-end festive period."

Mr David Lan, a shop assistant at Wee Lee Goldsmith and Jewellery, expects business to pick up later in the month.

He said: "People may be waiting to receive their year-end bonuses."

Pawnshops have not been affected much, as "now, the plunge is quite moderate compared with before", said Mr Ivan Ho, president of Singapore Pawnbrokers' Association.

But bullion dealers say business from investors has increased.

Mr Vincent Tie, sales manager at Silver Bullion, said sales rose by about 40 per cent from the second half of last year to the same period this year. "The prices today are close to a 10 per cent discount from last year," he added.

Mr Luke Chua, chief operating officer of BullionStar, said its revenue from selling gold in the past month has grown 27.7 per cent from that of the month before. On Thursday, it ran out of stock for 100g gold bars from more popular refineries.

But with prices going down since mid-October and a larger drop in gold prices of more than 6 per cent in July, buyers may have become numb to such changes.

Customers at jewellery stores yesterday told The Straits Times that they already had plans to buy jewellery, and the drop in prices was an added incentive.

Said 28-year-old nurse Sangeetha Sarma: "We heard that there's a drop in prices and decided to come to the store. Prices fluctuate, and we felt that we would rather buy it now."

A version of this article appeared in the print edition of The Straits Times on December 05, 2015, with the headline 'No gold rush even as prices near 6-year low'. Print Edition | Subscribe