Gold bullion prices and related exchange traded funds have dipped to five-year lows, and some of the largest consumers of the precious metal are waiting on even lower prices.
Over the past month, the SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have declined about 8.5%.
COMEX gold futures were trading at around $1,092 per ounce late Wednesday. The precious metal is stuck in its worst streak of losses since 1996 as investors dump commodities ahead of a Federal Reserve interest rate hike later this year.
Bullion dipped to $1,086.2 Monday, and Jeffrey Currie, Goldman Sachs’ head of commodities research, warned that prices could fall below $1,000 per ounce for the first time since 2009, reports Swansy Afonso for Bloomberg.
While Asia has been there to pick up the slack during prior periods of low gold prices, Howie Lee, an analyst at Phillip Futures Pte., argues that there won’t be much demand from bargain hunters this time around. Asian consumers may remain more reserved after the collapse in Chinese equities and weak monsoon rains in India.
Additionally, Mehul Choksi, chairman of Gitanjali Gems Ltd., India’s biggest diamond and gold jewelry retailer, believes buyers in India, the world’s second largest consumer of gold, are waiting on greater price stability before buying the metal.