Gold Rush From Dubai to Turkey Saps Supply as Premiums Jump (3)
2013-04-30 12:26:16.366 GMT
By Glenys Sim
April 30 (Bloomberg) -- Surging demand for gold from Dubai
to Istanbul has pushed physical premiums in the region to levels
not seen in years as the biggest price slump in three decades
lures consumers, according to MKS (Switzerland) SA.
Premiums paid by wholesalers and bulk buyers in Dubai to
secure a 1 kilogram bar of bullion are being quoted between $6
an ounce and $9 an ounce over the London cash price, said
Frederic Panizzutti, global head of marketing and sales at the
Swiss-based bullion refiner. That compares with about 50 cents
before the rout, Panizzutti, also chief executive officer of MKS
Precious Metals DMCC, said in an interview from Dubai.
Gold fell to the lowest in more than two years this month
on speculation that the global economy is recovering, unleashing
a purchasing frenzy among coin and jewelry buyers from China to
the U.S. Consumer demand for jewelry, bars and coins in Turkey
and the Middle East represented about 9.4 percent of the global
total last year, according to the World Gold Council. Bars have
been cleared from display in the souks, according to Gerry
Schubert, head of precious metals at Emirates NBD PJSC.
“Physical demand has been tremendous in a way I haven’t
seen for a number of years,” said Jeffrey Rhodes, global head
of precious metals at INTL FCStone Inc., who’s worked in the
industry for more than three decades. “The price collapse
prompted a physical gold rush and the evidence of the extent of
that is the prolonged period of high premiums that we’ve seen.
Reports from the gold souks are that business is good,” Rhodes
said from Dubai.