CHINA March 01 2016 10:02 AM

LONDON (Scrap Register): There has been some reluctance toward gold from Chinese market participants but this may change if the metal maintains its strength, said the analysts at UBS. 

Reporting on recent conversations with local market participants, UBS said that the Chinese have been reluctant to believe in the endurance of gold’s rally, thus many have used the price rise to book profits or liquidate positions, with $1,300 viewed as a selling opportunity. 

“This should not come as a complete surprise given the post-Lunar New Year selling on the Shanghai Gold Exchange, when participants in China came back to gold prices that were 7% higher,” analysts added. 

“Current attitudes are also likely influenced by seasonal factors; activity in China typically slows down in the months following the Lunar New Year holidays, reducing the urgency to jump in at this stage. Nevertheless, the sense is that interest is likely to increase should gold prices retain (their) strength and continue the upward momentum in the months ahead,” UBS noted.