Physical gold demand has been unusually strong for this time of year, with “good buying” from Southeast Asia, according to Standard Bank Plc.
The Standard Bank Gold Physical Flow Index signaled demand climbed to the highest since November, the bank wrote in an e- mailed report yesterday. Purchases typically pick up toward the end of the year amid religious festivals and the wedding season in India. Gold reached a four-week high of $1,696.28 an ounce in London on Jan. 17.
India, the biggest buyer in 2011, raised taxes on gold imports two days ago to reduce a record current-account deficit and to moderate demand. Standard Chartered Plc said earlier this month that its gold shipments to India soared on mounting concern the duty would be raised. While gold has gained for the past 12 years, the best run in at least nine decades, prices dropped as much as 9.5 percent from October through Jan. 4.
“It was strong in November and that’s normally a usual seasonal pattern that we see coming through from Indian post- monsoon, wedding season buying,” Marc Ground, a commodity strategist at Standard Bank in Johannesburg, said by phone yesterday. “The fact that January is as high as we see in November usually, that’s unusual. There was probably some Indian buying ahead of this tariff increase.”