Chinese mothers beat Wall Street to force gold price rebound
Attempts by Wall Street funds to drive down bullion value through short selling thwarted by Asian mothers swooping in to buy for weddings
Chinese mothers have beaten Wall Street hedge fund managers in forcing a turnaround in the price of gold after it dropped last month.
Taking advantage of the steepest drop in three decades, they have shored up prices by splashing out on gold for their daughters' weddings in the past couple of weeks, foiling the plan of finance gurus who have been short selling the precious metal in the hope of pushing it lower.
"The drop in gold price last month was caused by Wall Street fund managers who wanted to short gold and push it below the US$1,300 per ounce level before piling back in," said Haywood Cheung Tak-hay, the president of the Chinese Gold & Silver Exchange Society.
The drop in gold price last month was caused by Wall Street fund managers who wanted to short gold and push it below the US$1,300 per ounce level before piling back in
"These short sellers' dream has been shattered by buyers of physical gold worldwide, such as Chinese mothers, who seized the opportunity to buy cheap gold.
"This support has stemmed the price drop and brought gold prices back to the current level of about US$1,450 per ounce, far above the short sellers' target.
"I think short sellers will have their fingers burned on this one and be forced to buy back gold to cut losses."
Physical gold buyers worldwide, such as pensioners, retail investors and jewellery makers, apart from Asian mothers, all rushed to buy gold after the metal dropped 9.1 per cent on April 15, its biggest drop since 1983, to reach US$1,321. The frenzied buying, in which an estimated 300 tonnes of gold changed hands, helped prices to bounce back to about US$1,500.