HONG KONG, Sept 13: Premiums for good-delivery gold kilobars seesawed in and out of negative territory this week, following fluctuations in the spot price, while silver charges remained relatively flat, dealers said on Friday.

Investors around the world have sought alternatives to poorly performing equity and bond markets for their investment funds, but few have sought to invest directly in physical gold.

Demand for physical gold declined sharply as the spot price for gold soared to US$324 an ounce on Monday, the peak of the rally begun on August 23. But prices consolidated throughout the week, bringing charges back to around par.

Spot gold was indicated at US$318.25/8.75 an ounce on Friday afternoon.

The gold is chiefly marketed to Hong Kong-headquartered, China-based jewellery manufacturers, who are believed to sell the lion’s share of their output on the domestic market.

China issued a second batch of quotas for the export of silver on Thursday. This batch was for 480 tons of silver exports, bringing the total for the year to 1,740 tons. China issued quotas for the export of 1,260 tons in 2001.

But the announcement had little impact on the silver price.

Silver was offered flat this week, said Dobra, who added that with the extra supply, the white metal was likely to move to a discount later.

Dobra said China’s total silver production could decline this year. He said China’s silver output was derived mainly as a by-product in mining and refining other metals. With a decline in the production of lead and zinc, less silver would be produced.

Spot silver eased just a notch in trading on Friday, ending in Asia at US$4.57/4.59 an ounce, off its Asian day high of US$4.59/4.61.—Reuters