* Profit-taking sets in after gold jumped on Friday
* Hong Kong, Singapore gold premiums steady; Tokyo premiums
slide
By Rujun Shen and Siddesh Mayenkar
SINGAPORE/MUMBAI, June 6 (Reuters) – A sharp rally in gold
at the end of last week prompted a wave of scrap selling in
India and elsewhere in Asia as market participants took
advantage of higher prices, while fresh buying was sluggish on
Wednesday.
Spot gold jumped more than 4 percent last Friday on
rising expectations the U.S. Federal Reserve could be forced to
launch more monetary stimulus after data showed a surprisingly
weak jobs market.
Prices have since been steady above $1,600, with investors
eyeing a European Central Bank policy meeting later on Wednesday
and a speech by Fed Chairman Ben Bernanke on Thursday.
Gloomy equity markets and high interest rates have forced
investors in India to cash out of gold, said Prithviraj Kothari,
president of the Bombay Bullion Association.
“There is no money available and people are selling their
old gold,” Kothari said, adding that India could see scrap sales
rise to 400 tonnes this year, more than triple last year’s 130
tonnes.
The rupee tumbled to a record low against the dollar last
week, but has since pared some of those losses. The weak rupee
has kept local gold prices at lofty levels and dampened buying
demand in India, traditionally the world’s top gold consumer.
Continued…
