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High gold prices deter Asian investors

08-10-2011 14:46 BJT

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As financial markets across Asia take a hit from global volatility, investors in the region are seeking alternative investments such as gold. But recently, the spike in the price of the yellow metal is making many think twice before buying.

With Asian financial markets in turmoil, safe-haven assets such as gold are becoming all the more attractive.

The already-high gold demand has been further boosted due to concerns over the debt situations in Europe and the U.S.

In South Korea, investors hope to have deeper pockets so as to invest more.

Baek So-ra, a Seoul resident said, "I want to buy gold for investment if I have extra money. It's likely the gold price will continue to rise, so I would like to invest in gold."

China has also seen a surge in demand for gold and silver since late last year, as investors dumped stocks.

But as gold prices hit a new high above 1 thousand 770 U.S. dollars an ounce on Tuesday, many are thinking twice before investing in the precious metal.

Angel Yung, a Hong Kong resident said, "The gold I own was bought a long time ago. We just put them in the safe. But we won't buy anymore at the moment because the prices are much too high now."

But governments haven't been deterred from purchasing gold. South Korea's central bank bought gold for the first time in 13 years. It purchased 25 metric tons of bullion in June and July, more than doubling its holdings.

Lee Seung-jae, a researcher of Daishin Securities said, "Also, the Bank of Korea recently purchased gold, other countries' governments are also trying to buy gold instead of U.S. dollars or U.S. government bonds."

Experts point out speculation is a major reason behind the recent price hikes. But they believe gold prices will rise further if stock market jitters persist.

Editor:Li Wanran |Source: CNTV.CN

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