Gold futures topped $1,400 an ounce on signs that jewelers and other users of the metal are taking advantage of the biggest slump in prices in three decades.
A rush in India to buy jewelry and coins will boost gold imports this quarter as traders and banks run out of inventory, Mohit Kamboj, the president of the Bombay Bullion Association Ltd., said yesterday. Customer traffic in Hong Kong and Macau soared from April 13 to April 16, Chow Tai Fook Jewellery Group Ltd. said. The U.S. Mint has sold 153,000 ounces of American Eagle gold coins in April, the highest in almost three years.
The metal plunged 13 percent in two sessions through April 15, the biggest slump since 1980. Futures touched $1,321.50 on April 16, the lowest since January 2011, partly on concern that central banks in Europe will sell holdings to pay debt. The price will rebound as skepticism over the recovery in the global economy increases demand, billionaire T.S. Kalyanaraman, the chairman of Kalyan Jewellers, said.
“The gold price is finally reacting to the physical demand,” Tim Gardiner, a managing director at TD Securities Inc. in New York, said in an e-mail. “Reports of record demand keep coming in from around the globe with retailers in North America, Europe and Asia-Pacific all out or running out of stock as buying interest overwhelms supply.”
Gold futures for June delivery climbed 0.2 percent to settle at $1,395.60 at 1:35 p.m. on the Comex in New York. Earlier, the price reached $1,424.70, up 7.8 percent from the low on April 16. India is the world’s biggest buyer, followed by China.
The price will climb to $1,800, Kalyanaraman of Kalyan Jewellers said an e-mail. The closely held company is based in Thrissur, Kerala, in India. Chow Tai Fook, the world’s largest jewelry chain, is based in Hong Kong.
“We’ve seen enormous numbers of people, and they’re all buying,” said Nigel Moffatt, the treasurer at Australia’s Perth Mint, which refines almost all of the nation’s bullion. “There’s been continued buying interest, particularly into China,” he said in an interview on Bloomberg Television.
Yesterday, holdings in exchange-traded products backed by gold decreased 0.7 percent, the 13th straight drop, to 2,348.099 metric tons, the lowest since January 2012, according to data compiled by Bloomberg. Assets in the SPDR Gold Trust, the biggest ETP, dropped to the lowest in three years.
Silver futures for May delivery retreated 1.2 percent to $22.96 an ounce. On April 16, the price touched $22, the lowest since Oct. 11, 2010. This week, prices slumped 13 percent, the most since September 2011.
Silver has tumbled 24 percent in 2013, the most among 24 raw materials in the Standard & Poor’s GSCI Spot Index. Gold dropped 17 percent, entering a bear market last week.
On the New York Mercantile Exchange, platinum futures for July delivery fell 0.4 percent to $1,423.90 an ounce, extending the week’s drop to 4.8 percent, the most since December 2011.
Palladium futures for June delivery rose 1.1 percent to $677.05 an ounce, paring the weekly drop to 4.5 percent.