Japan’s gold exports have doubled this year as individual investors locked in profits after gold prices soared earlier in the year, but retail demand for bullion has been picking up steadily over the past few months.

Industry sources say the rise in retail demand for gold may turn Japan into a net importer again, but that may not happen immediately as many players are still looking to unload their gold holdings when prices recover.

Japan was a net importer of gold in October for the first time this year as investors bought on a plunge in prices, but exports exceeded imports again in November, finance ministry data showed on Friday.

In the eleven months to November, Japan’s exports of unwrought solid gold, gold bars and sheet totalled 393.9 tonnes, up from 174.9 tonnes in 2007.

In November alone, Japan exported 47 tonnes of gold, rising more than five-fold from October, while imports more than halved to 4.1 tonnes from the previous month.

A Tokyo-based trader said the rise in exports last month may have been related to spot gold prices rebounding above $800 an ounce after falling to near $680 in late October.

“There were still many people who hadn’t sold,” the trader said, referring to a wave of selling after spot gold prices hit a record high of $1,030.80 an ounce in March.

But he noted that in Japan, premiums on spot gold rose by as much as about $2 when gold prices dipped below $700, reflecting strong demand from Japanese individual investors.

That compared with discounts deepening by as much as around $3 when the gold market was rallying.

The global financial turmoil has prompted many Japanese retail investors to reassess gold as a long-term investment rather than just a safe haven at times of crises, industry sources say, adding that a wider array of investors are now attracted to metal.

Other overseas assets have lost their appeal as central banks around the world slash interest rates close to zero, wiping out huge yield differences and on the yen’s appreciation to 13-year highs against the dollar.

“Although the principal is not guaranteed and it’s does not bear interest, gold does not fail,” said Osamu Ikeda, general manager at Tanaka Kikinzoku Kogyo, Japan’s biggest bullion retailer.

Tanaka Kikinzoku saw a record number of new customers signed up for its online gold savings plan in November, which allowed customers to start from a purchase of a minimum of 1,000 yen worth of gold each month.

Tanaka does not report actual volumes or value, but it said its sales of gold exceeded its purchases for the fourth month in a row in November.

“Given the lack of a key, strong currency, the importance of gold as an alternative to the dollar has been heightening,” said Takeo Okuhara, market economist at Daiwa SB Asset Management.

“Gold is an asset with value more than zero and is also regarded as a type of savings in times of economic deterioration,” he said.

Some of the gold individual investors sell to bullion houses is recycled for industrial and jewellery use in Japan, but the remaining bulk is sold via Singapore and other trading centres to the rest of the world.

Chikako Mogi, TOKYO, Dec 26 (Reuters)