You are right. Sunday night gold trading at Asia probably will be the first wave.
Here has some thing to think about: <G>
Japan gold rush seen ahead of bank deposit reform
Fri January 9, 2004 03:48 AM ET
By Miho Yoshikawa
TOKYO, Jan 9 (Reuters) - All that glitters is gold.
From cuff links to a bonsai tree with finely crafted spiky leaves, virtually everything on display at the store in Tokyo's ritzy Ginza district is made of the shiny metal.
The store, run by Japan's top bullion house Tanaka Kikinzoku, was doing a brisk business at the start of the year with more than a dozen customers filling the room, most queuing at a counter to buy or sell gold bars and coins.
Osamu Ikeda, general manager of the bullion house, said private investors continue to see gold as a way to diversify their investments.
"There is more buying than selling taking place...because most private investors see gold as a long-term asset rather than a way to make a quick profit," Ikeda said.
As evidence of how good business has been, he said Tanaka Kikinzoku has sold about 300 wooden chests filled with 10 kg of gold bars, at a price tag of about 15 million yen ($141,300), in the three months since it began offering them.
Though few might buy a miniature potted pine tree or a statue of Buddha -- both of which cost several times the market value of their weight in gold -- as an investment, Ikeda said gold coins and bars continue to sell well.
Other Japanese bullion houses and industry officials also testify to private investors' appetite for gold, which many expect to intensify this year.
INVESTMENT TOOL
Against the background of worries over Japan's economy and sagging real estate values, the idea of buying gold as an investment tool has taken root, industry officials say.
They say buying this year will be fuelled by the planned end of a full state guarantee on bank deposits in April 2005.
They point to a precedent. Gold buying skyrocketed in the January-March quarter of 2002, just before the government ended state guarantees on term deposits in April of that year.
Buying of gold bars and coins by Japanese in that quarter alone amounted to 45 tonnes, or almost 46 percent of the total bought in 2002, data from the World Gold Council (WGC) showed.
WGC regional director Itsuo Toshima sees purchases of gold bars and coins gaining momentum in the latter half of this year.
"I believe the market will become nervous as the date (of the end to state guarantees) approaches, leading to a significant shift in funds to gold in the latter half of this year," he said.
"There will be what you could call a flight to quality."
Sales petered out in 2002 after ballooning in the first quarter, Toshima said. But purchases of gold coins and bars were likely to be brisk for a longer period this year, he said.
This year's purchases of gold coins and bars are seen possibly larger than the 98.1 tonnes reported for 2002.
Spot gold futures rose to a 15-year peak of $430.50 an ounce this week, as a weak dollar prompted investors to move to alternative currencies and precious metals.
The yellow metal, also favoured as a safe haven due to continuing concerns about geopolitical instability and terror attacks, rose 20 percent in value in 2003.
Many in the market believe gold will move higher this year.
"If the U.S. dollar's weakness continues, the price of gold will go up more," Tanaka Kikinzoku's Ikeda said, predicting it could hit $450 an ounce in the first half.
© Reuters 2004. All Rights Reserved. |
