DEMAND from private households buying gold is both "excessive and sustained" worldwide according to retailers reporting a surge in orders.
"There is a shortage of physical gold in the local [Dubai] market due to retail buying of small and medium gold bars," today's edition of Gulf News quotes Tarek El Mdaka, head of the Kaloti Jewellery Group.
Pointing to supply-chain bottlenecks between the wholesale market and the production of smaller bars for retail investors buying gold, "Availability is linked to the capacity to produce the smaller bars," El Mdaka adds, "more rather than the availability of the raw material itself."
Over in India – home to the world's heaviest annual gold buying – "Everyone is thinking that they will miss the bus if they don't buy now as prices have started moving up," says Ramesh Pahlajani, a partner at Bherumal Shamandas Jewellers in Mumbai, speaking to Bloomberg.
The famous Zaveri Bazaar was "thronged" for the second weekend running, the newswire says, while Western households are also rushing to buy gold.
Sales of gold coin by the US Mint have trebled from last month, and they have doubled at Australia's Perth Mint. New customers at world-leading online provider BullionVault rose 250% from the week before.
Demand in China, the world's second-largest gold consumer, is likely however to be tempered this week amid the Labor Day and Golden Week holidays, analysts also say. And with the gold price already recovering half of April's 18% plunge, consumer demand may ease back, analysts say.
"Every time the price goes up, the purchases should get less strong," reckons Matthew Turner, now at Macquarie Bank in London.
"We expect that [surge in private investor] demand to be satisfied within the next one to two weeks," agrees Tom Kendall, analyst at Credit Suisse – also speaking to the Financial Times, and author of a report in early February entitled 'End of the Gold Era'.
Already this week, Indian dealers report slower business. "[Wholesale] sales are down 25-30% as gold prices are up," says MoneyControl, quoting a dealer with a state-run bank in Mumbai.
Following what the financial news-site calls "a gold buying frenzy among importers" ahead of mid-May's Akshaya Tritiya festival – traditionally seen as an "auspicious" time for gold investment in southern Indian states such as Kerala – local premiums are expected to fall back from last week's 5-year highs of $10 per ounce above international prices.
"Premiums should come down from the current $4," MoneyControl quotes a Mumbai dealer. That would deter importers from buying such quantities of gold overseas in a bid to meet local Indian demand.