Gold consumers across Asia greeted bullion's run to a record high cautiously on Wednesday, with a few moving to cash in gains but the majority opting to wait for the rest of a rally they believe has only just begun.
In contrast to a second day of busy trade on global gold markets, the scene at shops and jewelry merchants from Sydney to Hong Kong to Mumbai was marked by a distinct lack of occasion, suggesting that the wave of retail scrap selling that greeted gold's record run in March 2008 may not be quick to recur.
Today's been like any other day, said David Carr, of KJC Coins Australia in Sydney, which deals in precious metal coins and bars. No one's coming in to sell gold because the price jumped overnight, it's more wait and see, business as usual.
The Australian outback gold mining town of Kalgoorlie, home to a nearly Times Square-sized electronic ticker tape broadcasting up-to-the-minute bullion prices, also was quiet.
There's nothing going on that's out of the ordinary, said John Horner, editor of the Kalgoorlie Miner newspaper.
Profit taking -- read selling -- replaced gold purchases that in New York and across Europe on Tuesday had swept spot bullion more than $10 above its previous March 2008 peak, and carried through on Wednesday to a record $1,048.20 an ounce.
The issue of scrap supply in the gold market -- generated largely from the resale of jewelry to merchants -- has taken on greater importance in recent years, as the advent of physically backed Exchange Traded Funds (ETFs) attracts new investors.
The biggest such fund now holds more than 1,000 tons of gold, equivalent to the world's fifth-largest central bank, and analysts had said that only the flow of scrap material into the market had prevented gold from soaring much sooner, much higher.
While there was some evidence of retail sales, it wasn't overwhelming.
It is simple, buy low and sell high -- I am making a 10 percent profit already so I am selling, said Nguyen Duc Hung while waiting to sell five taels of gold at a shop on Hanoi's Ha Trung street. Vietnam is Asia's second-biggest gold buyer.
To date, there have been no reports of gold hoarders burying stashes in secret spots as was the case in 1980, when gold zoomed above $800 an ounce for the first time, or about double today's level when adjusted for inflation.
Both buyers and sellers are coming to the shop today, they are more or less evenly balanced, said Osamu Ikeda, general manager at Tanaka Kikinzoku Kogyo, Japan's top bullion retailer.
Rival Tokuriki Honten Co. Ltd. saw a similar scene.
There are no queues outside our shops, said general manager Fumio Yamamoto. For the Japanese, the (yen-based) price is too high to buy, but too low to sell.
One of the biggest reasons Asian consumers may not be rushing to sell is that gold's record high is limited to those trading in the U.S. dollar, whose steady decline since March has been the biggest factor in bullion's rise.
In the Australian dollar, gold prices are down 20 percent since March; in the yen, they're still far from their peaks.
The next focus for the market will be India, where consumer demand typically peaks next week for the Dhanteras and Diwali festivals, and the strong rupee kept the local price of gold under the psychological level of 16,000 rupees ($342) per 10 grams.
Buying was very strong in the last couple of weeks, but it has been affected now even though the rupee has given a good cap to local prices, said Pinakin Vyas, assistant vice president, treasury at IndusInd Bank, a private bank in Mumbai that imports gold to sell to local traders and jewelers.
Investors will not buy at these levels though need-based buying from jewelers will continue. People will wait for some time and then come back to the market.
Amid speculation about the long-term prospects for the dollar, the outlook for inflation, the economic recovery and the fate of the financial system, some of the smaller players in the global gold story had a much simpler view.
The price is high and I don't wear them, said a 60-year-old Hong Kong housewife standing outside a downtown jewelry store, who only gave her surname of Fung, after selling a gold ring and a gold pandan purchased more than 20 years ago.
So I sold.
(Additional reporting by Polly Yam in HONG KONG, Miho Yoshikawa and Chikako Mogi in TOKYO and Nguyen Nhat Lam in HANOI; Editing by Michael Urquhart)