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Even with gold prices dropping to near 4-year lows, buyers in China - the world's leading market - aren't tempted, suggesting prices have further to fall.
When gold prices are in a slump, Chinese buyers, eyeing a bargain, traditionally move in and stop the rot. But that doesn't seem to be happening this time around. The current market decline has seen the price of gold lose more than a third of its value in two years, to around $1,173 an ounce.
Unusually, prices on the Shanghai Gold Exchange, the world's biggest platform for physical trade, are at a discount of around $1 an ounce to the global benchmark, slipping from premiums of $1-$2 an ounce last week. Since all physical gold trade in China goes through the exchange, it is seen as a reliable barometer of Chinese demand.
World gold prices are at their lowest since 2010 and slid $25 an ounce on Friday as the U.S. dollar strengthened, but Chinese buyers still aren't biting, predicting prices have further to drop.
There is little sign of increased demand, dealers at importing banks in China and traders told Reuters on Monday, recalling how China led a rush to buy jewelry and gold bars and coins when prices slumped about $200 an ounce in two days last year.
"We've not seen any significant physical demand on the back of this (price drop)," said Victor Thianpiriya, an analyst at ANZ in Singapore. "That's a worrying sign for prices as Chinese buying was really the only thing supporting the market on self-offs last year."
China overtook India as the biggest gold buyer last year, with consumers and investors buying record amounts of the precious metal as prices tumbled 28 percent after a 12-year rally. That splurge, along with uncertainty over gold prices and a crackdown on corruption, have dented China's appetite this year. Demand has dropped by more than a fifth in the first nine months of the year, according to the China Gold Association.
"Chinese demand was again a little disappointing considering how much lower we're trading," said Alex Thorndike, senior trader at MKS Group, referring to Monday's trading levels. The discounted prices are "clearly reflective of their lack of interest."
"China is usually very price elastic. From here, it looks like we could go down to $1,100 (an ounce) or even $1,000," said one dealer. "Maybe people would rather wait it out and come on board on lower prices."
Chartists predict prices could dip to below $1,000 an ounce for the first time in five years.
Buyers in India, too, were cautious, with demand and local premiums holding steady on Monday. India last month celebrated the festivals of Dhanteras and Diwali - usually a strong period for buying gold.
"Demand is not increasing. Normal demand is there, but the reduction in prices has not induced any fresh buying," said Bachhraj Bamalwa, director at the All India Gems and Jewelry Trade Federation.
Harmesh Arora, a partner at National India Bullion Refinery, said investors were cautious, thinking prices will fall further.
"There is now uncertainty in the market, and consumers are waiting for price stability," he said.