REPUBLIKA.CO.ID, SINGAPORE -- Few Indonesians start buying gold as the prospect of weaker dollar would make the precious metal more attractive for investors holding other currencies. Although it is not sure if this is an early sign of gold rush.
"I am not sure about India, but yes, the Indonesians have been buying," said a dealer in Singapore, who also trades with top consumer India. "The Thais sold gold yesterday but they also bought back last night. Thailand is very much a market of their own."
Volumes remained thin during China's week-long Lunar New Year holiday. "We've seen light buying from Indonesia, but we are still in a holiday mood. It looks like people will prefer to buy on dips. Premiums for gold bars are steady at 1 US dollar," said another physical dealer in Singapore. "There's not much on silver, but we will still get demand from India or Thailand. We can't say if the demand is exceptionally good," he added.
Gold regained strength on Wednesday after an early dip spurred buying from jewellers in Asia, but prices were stuck in a range as investors awaited the outcome of the US Federal Reserve's policy meeting, which could weigh on the dollar.
The Fed, which will start a new practice of announcing policymakers' interest-rate projections, will probably conclude the meeting with a signal that interest rates will be held near zero into 2014, according to a Reuters poll. Any signs that interest rates will stay lower for longer could put pressure on the dollar, and boost gold's safe haven appeal, and prices. A weaker dollar would also make gold a more attractive buy for investors holding other currencies.
Gold added 2.29 US dollar an ounce to 1,667.89 US dollar an ounce by 0637 GMT, off an intraday low of around 1,664 US dollar an ounce. Gold hit a 6-week high of 1,681.16 US dollar on Monday.
Silver rose 23 cents to 32.24 US dollar an ounce. It rallied to 32.76 US dollar an ounce on Monday, its strongest since early December.
Some Asian markets reopened on Wednesday but China and Hong Kong remained closed for the Lunar New Year holiday. Asian shares rose on Wednesday, underpinned by strong earnings from U.S. technology giant Apple, stabilising European money markets and falling euro zone debt yields, with investors shifting their focus to the Fed from Europe.
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