Jewellers across Asia rushed to buy gold on Thursday after prices tumbled more than $100 an ounce since spiking to a record above $1,000 an ounce this week, pushing up premiums in key bullion trading centres.

Gold fell more than 2 percent to hit a 1-month low of $920.30 an ounce as funds sold bullion after pushing up the price to a lifetime high of $1,030.80 on Monday.

Dealers also noted buying from investors as surging oil prices elevated gold's appeal as a hedge against inflation. India, the world's largest consumer, was buying on dips as the busy wedding season progressed.

"I see very good investment offtake in China, Vietnam and Japan," said Albert Cheng, managing director for Far East of the World Gold Council.

"I guess in Vietnam there's a lack of investment tools and the stock market is very jittery. So people would better put money in gold. It's almost the end of the first quarter. The physical demand is very good.

Gold bars were offered at a premium of 10 U.S. cents an ounce to the spot London price for the first time since last August in Singapore, a centre for bullion trading in Southeast Asia. Gold bars were on par with London prices last week.

Vietnam, one of Southeast Asia's main consumers, saw demand for investment falling more than 19 percent to 56.1 tonnes in 2007, when gold neared a record high. But dealers said the Vietnamese were the most active buyers in recent weeks.

"Vietnam is buying gold even when it's trading at record highs this month. For them it's more for a hedge because inflation was more than 12 percent last year," said a dealer in Singapore.

"Nobody wants to keep dollars because it's depreciating," said the dealer, who also noted demand from jewellers in India, Indonesia and Thailand.

Gold's drop attracted buying from jewellers in Hong Kong, a key bullion trading house in East Asia, pushing up premiums to as high as 20 U.S. cents an ounce. Gold bars were offered at a discount of 20 cents last week.

"Physical buyers and bargain hunters are buying back at the low. Everybody is rushing to buy," said a dealer in Hong Kong.

"But I guess long-term sentiment is still bullish because the Fed may cut rates again in their next meeting in April," he said.

Gold has gained more than 23 percent in 2008, driven by demand from investors and speculators on hopes of more U.S..

Courtesy : THEFINANCIALEXPRESS.COM

Bank of Baroda, which closed its offshore banking unit in Bahrain in 1993, will return to the Gulf nation by opening a full fledged branch as part of a major expansion plan in the region.

The new license, granted by the Central Bank of Bahrain (CBB), marks the return of BoB to Bahrain, the fifth largest bank in India. BoB, which first established an offshore banking unit in Bahrain in 1980, was closed in 1993 due to a foreign exchange crisis in India.

Indian Ambassador Balkrishna Shetty and Bank of Baroda's global chairman and managing director Dr Anil Khandelwal will attend the reception to mark the opening of the new branch on Sunday.

The new branch will target high net worth individuals and corporates in the region, said GCC operations chief executive Ashok Gupta.

Its main lines of business will be deposit products, loans and syndications, trade finance and structured products, treasury products and services as well as participating in debt market and private banking/wealth management services, he added.

"The CBB welcomes the return of Bank of Baroda to Bahrain," said CBB licensing and policy director Ahmed Abdul Aziz Al Bassam.

"The business environment for wholesale banking is particularly attractive, given the economic boom taking place in the Middle East region and India," he said.

Bahrain's wholesale banking industry has grown significantly over the past two years, with the consolidated assets of wholesale banks amounting to USD 77.2 billion in August last year, an increase of over 20 per cent over the same period in 2006.

Khandelwal during a visit to the UAE in January, had said: "the Gulf region is very important as part of overseas expansion and the UAE operations are our top priority since they are most profitable."

Apart from Bahrain, BoB is the only Indian bank to have a full-fledged operations in the UAE with six branches and 17 ATMs.

It also has its presence in Oman. "We are also looking at Kuwait, Saudi Arabian and Qatar Markets," he said.

BoB has 2,800 branches in India and has 66 offices abroad in 24 countries, the highest for an Indian bank. By 2012, we plan to have 100 overseas offices, he added.

Courtesy : THEFINANCIALEXPRESS.COM