Gold buyers in China remain cautious amid the slowdown of demand for bulk commodities and the looming interest rate hike in the United States, the China Business News reported.
According to the report, there are few gold investors despite the current drop in gold prices, which is the lowest in five years, based on market transactions.
China Business News said that their reporters had visited several banks and found that despite gold prices falling nearly 20 percent, gold buyers are still few. Gold prices have fallen since the first sharp decline, which triggered a buying spree, the newspaper said.
A Bank of China official said that gold prices have stopped their slide in the past two days and that they have fielded many inquiries related to gold despite few actual purchases.
"Everyone is adopting a wait-and-see attitude," the official said, adding that people do not buy gold for investment, but for risk hedging.
The prices of gold in the international market have floated below $1,100 an ounce since the collapse of gold prices on July 20. Since the end of 2012, world gold prices have dropped by 35 percent, while gold futures prices have fallen by 67.8 percent this year.
Some analyst said that gold still has a grim outlook, as they predicted that prices could drop below $1,000 this year. The last time prices dropped to below $1,000 was in 2009.
Price of commodities such as crude oil, copper, tin, cotton and sugar have also dropped, the Bloomberg Commodity Index plummeted to a new 13-year low, and bulk commodity was considered the worst asset this year.
"The factor of fear is the most lethal threat to bulk commodity, and this was also the reason for panic selling of bulk commodities," Zhu Yi, an analyst with Bloomberg Intelligence, said.