Friday, March 21, 2008

Not Everyone Bothered by Drop in Gold Prices: Ask Asian Jewellers

After Thursday's drop in gold prices of over $100 an ounce, Asian jewellers scrambled to buy gold for their trade.

India, unsurprisingly, was a very busy market, as the world's largest consumer of gold continues to buy on the drop in gold prices, as their wedding season is in full swing.

Along with the long-held custom of building up a daughter's dowry from her birth, Indians also distribute it to one another for a number of special occasions. That, and using it for jewellery, as well as an investment, makes gold so important to the Indian people.

Another key Asian buyer of gold has been Vietnam, whose 12 percent inflation rate last year has kept them buying gold as an inflation hedge.

"Vietnam is buying gold even when it's trading at record highs this month. For them it's more for a hedge because inflation was more than 12 percent last year," said a dealer in Singapore. "Nobody wants to keep dollars because it's depreciating."

Other countries where gold is in high demand for jewellers are Thailand and Indonesia.

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