SINGAPORE - Gold retailers struggled to cope this week as parents buying dowries, casual shoppers and tourists snapped up bars, coins, nuggets and jewellery as a slump in the price of the yellow metal released years of pent-up retail demand.
The price decline in the past week, the steepest in 30 years, has tarnished gold's appeal for the portfolio investors whose money had fuelled a 12-year bull run. As investors rush out, consumers that were priced out of the market for years have rushed in.
"It's just like the sales after Christmas," said Nigel Moffatt, treasurer at Perth Mint, which refines between 300 and 400 tonnes of precious metals each year at what it says is the largest facility in the southern hemisphere.
"Anything you could buy $200 cheaper today than you could last week becomes fairly tempting. It is surprising how such enormous liquidation brings such enormous interest at the other end from small investors. What we keep in terms of retail stocks, yes, they are being depleted fairly quickly. As usual, it appears that China is leading the charge."
India is the world's top gold consumer, accounting for 20 per cent of global demand. The fall in prices is well-timed for consumers there, coming during the wedding season and ahead of the festival of Akshaya Tritiya, which falls next month and during which gold buying is traditional.
"My sales are 50 per cent more than last year ... and we expect good business to continue as weddings will last till July," said Kumar Jain at his shop in Zaveri Bazaar, India's biggest gold market, in Mumbai.
Jewellery is traditionally part of dowries in India, where parents give gold to their daughters at weddings.
"We got to know from a news channel that prices are down, so we came to buy a gift for our nephew, who is getting married... I even think this is once in a lifetime opportunity," said 41-year old Rajesh Mehta, who bought 22 grams of gold in two chains worth more than 50,000 Indian rupees (S$1,145).