Premiums for gold bars jump to 2-year high, Chinese buy

Image by hto2008 via FlickrPremiums for gold bars jumped to their highest in two years on Tuesday as worries about inflation drove investors in China, the second-largest consumer of the precious metal after India, to bullion ahead of the Lunar New Year.

China's inflation raced to a 28-month high of 5.1 percent in November, and it's not clear whether policy steps the government is taking will calm prices, benefiting gold which is traditionally seen as a store of value in times of uncertainty.

Gold bars were offered at premiums of $3 an ounce to the spot London price in Hong Kong, physical dealers said, matching a similar level seen in late 2008. Refiners were running out of stocks and some even quoted premiums as high as $6. More...