Bargain hunters in gold buy spree

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The Independent Online

Gold rose more than 2 per cent yesterday as bargain hunters across Asia bought up physical gold bars and jewellery after the precious metal hit two-year lows last week.

Even the US Mint reported sales of gold coins to the public of 167,500 ounces so far in April, the highest since May 2010.

But traders warned that the technical outlook for gold, which is down more than 15 per cent this year, has yet to improve while investors continued to offload exchange traded funds (ETFs) linked to the yellow metal. Spot gold rose to a session-high of $1,438.66 per ounce, more than $100 above a two-year low of $1,321 reached on 16 April.

Gold posted its biggest-ever daily loss in dollar terms last Monday, shocking investors who have used the precious metal as protection against inflation and other market risks.

But while investors fled the market, the price fall has released years of pent-up retail demand in the past week. Parents buying dowries, casual shoppers and tourists have snapped up bars, coins, nuggets and jewellery.