Demand for buying physical gold is still 'very, very strong'

A senior trader has claimed today (November 12th) that the physical demand for buying gold is still strong, despite recent price trends suggesting to the contrary, Reuters reports.

Gold has suffered so far this week as it has been pulled down by the declining price of crude oil and industrial metals, although a softer dollar has limited the slide.

Now Afshin Nabavi, head of trading at MKS Finance, has explained that anyone contemplating investing in gold bullion is in good company.

He told the news provider: "All the hints we are getting from the physical market are positive. Demand is still very, very strong."

Mr. Nabavi also added that some investors are holding fire until they can assess fresh data on US oil inventories, which is expected to be released tomorrow.

If demand continues to be strong, it is possible that gold may break upwards if the dollar continues to fall - a view expressed by Aaron Smith, the managing director of Superfund Financial.

"It's not inconceivable for gold to go back to its nominal all-time high, which was over $1,000 per ounce, by the end of the year or Q1 next year," he said.

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