Thursday, April 17th 10:35 AM IST

Gold trades below $1,300 an ounce; Physical buying picks up

# India Gold  

Lower gold prices have caught the attention of participants in physical markets, but buyers seem tentative to participate in size for now despite recent dips below $1,300 an ounce, said Swiss bank UBS.

NEW YORK (Bullion Street): Lower gold prices have caught the attention of participants in physical markets, but buyers seem tentative to participate in size for now despite recent dips below $1,300 an ounce, said Swiss bank UBS.

“In India, lower gold prices over the next two weeks come at an opportune time in light of the approaching important Akshaya Tritiya festival, but any pick-up there would remain subject to the current supply constraints,” said analysts with UBS.

Indian authorities last year imposed restrictions on Indian gold imports due to the current account deficit.

“In China, it would take a larger dip in global gold prices for physical buyers to become fully interested – at current price levels, gold priced in CNY is still around end-February levels, when demand started to tail off and SGE (Shanghai Gold Exchange) prices moved into a discount. With the help of a weaker currency, local gold prices in China are still more than 10% more expensive than price levels at the beginning of the year,” they continued.

Stronger-than-expected buying in January and February followed by slower demand in March could mean that the Chinese market still has ample stocks to work through, UBS concluded.

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