Regional gold demand up; jewellers busy in Q2
By Siow Li Sen
S
INGAPORE'S gold imports, which are mainly bound for the region, have surged as confidence returns.
Singaporeans, meanwhile, prefer to deck themselves in jewellery, pushing sales up in the normally sluggish second quarter, and largely ignoring pure gold items although gold prices have fallen to near 20-year lows, jewellers say.
Gold imports up to June totalled 141 tonnes, some 85 per cent of 1998's total of 166 tonnes, with some 95 per cent of it mainly bound for Indonesia, Thailand and India, said Albert Cheng, regional director of the Gold World Council.
"Last year was terrible where they sold gold in panic," Mr Cheng said referring to Indonesia where the rupiah lost 80 per cent of its value as the country plunged into an economic abyss. He said it was still largely rural demand that is driving gold sales in Indonesia.
In Thailand, the story is pretty much the same and in local currency terms, the price of gold is actually up which seems to drive demand even more, he said. "The mentality of Asians is buy when the price is going up, rather than when the price is going down."
In Singapore, jewellers are enjoying brisk sales in the second quarter, normally the worst period after the Chinese New Year spending spree, with tills ringing non-stop. "Some sales in the second quarter could be close to Q1," Mr Cheng said, gauging from his feel of the industry.
But gold sales are just so-so because yellow gold is not fashionable, in trendy Singapore. "Singaporeans buy gold not because of price but because they feel wealthy, so they buy for their mother-in-law when they've made some money. They are not moved by price," Mr Cheng said.
Wan Shung Ming, president of the Singapore Jewellery Association, said jewellery sales were "not bad".
"In the past three years, it was like for every 10 shops opened, 30 shops closed," Mr Wang said. "Talking to my colleagues this year, I think there are more shops opened than closed."
Part of the reason is due to a structural change where instead of concentrating stock in one or two shops, companies now open several smaller outlets, stocking up less pricey items.
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