THERE is no relief in sight for gold investors, with analysts tipping that prices are not likely to recover in the short term.
The price of gold has fallen about 12 per cent from last Wednesday, hitting US$1,382.90 an ounce at 7pm yesterday.
Gold is being dumped in response to Monday's weak growth data out of China and reports that Cyprus was planning to sell part of its bullion reserves to pay down debt, say experts.
But while many are getting out of gold, others see a buying opportunity.
Ms Beh Hsia Wa, director of bullion and futures at United Overseas Bank (UOB), the only local bank that sells physical gold, said it has seen "strong buying interest at its main branch from retail customers", with the most popular being the 1kg gold bar.
The price of a 1kg bar yesterday was $55,290.
Transaction turnover on UOB's gold savings accounts, which allow deposited cash to be converted into gold, has been about eight times higher than average over the past two days, she added.
Mr Ivan Ho, president of the Singapore Pawnbrokers' Association and owner of Heng Seng Pawnshop in Toa Payoh Central, said gold purchases have been 15 to 20 per cent higher since Monday. "Gold is likely to continue to remain relatively popular as long as the economy is less than favourable," he said.
OCBC economist Barnabas Gan said bearish sentiments have been reflected primarily in the trading of gold futures and exchange-traded funds (ETFs).
ETFs are funds tracking the price movements of an underlying asset such as a stock market index or commodity.
An example is the Singapore-listed SPDR Gold shares, which fell $4.57 to $132.10 yesterday.
Phillip Futures strategist Simon Teo said: "There is still concern that inflation may spiral out of control in developed countries as they move into unprecedented monetary easing policies... Gold prices could be supported as investors may still look to gold as a hedge against inflation."
