Gold has many roles for Asian buyers -trader
PRAGUE, June 17 (Reuter) - Gold may not compete as an investment with other instruments in Asia but its roles as a gift and an insurance item should mean it does not have to, delegates at the Financial Times Gold Conference heard here on Tuesday.
Jonathan Spall, head of precious metals in Asia for Deutsche Morgan Grenfell pointed out that gold demand in the principal markets of Asia accounted for about 50 percent of world mine production.
He said the perception of gold varies enormously between east and west. One difference was the east's culture of gold owning and giving.
The Asian festivals were times when gold gift giving accelerates and at marriages and births gold was an appropriate present.
``For some people the gold may be a form of saving in which case the physical offtake is just temporary. For others it is a gift which will be kept in which case the gold permanently disappears from supply,'' Spall said.
``There was also a lack of alternative investments which encouraged Asian savers into gold. He warned that as investors and the investment environment became more sophisticated, this demand could diminish.
However part of the investment role was as an insurance policy which was not expected to perform particularly well against other assets.
Some changes were growing in the attitude to gold purchasing.
``There is less need to buy gold to protect against war or poor crops but the increasing affluence of the region means a rapid growth of gold as an adornment,'' he said.
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