Jewellers across Asia rushed to buy gold on Thursday after prices tumbled more than $100 an ounce since spiking to a record above $1,000 an ounce this week, pushing up premiums in key bullion trading centers, according to Internet.

Gold fell more than 2 per cent to hit a 1-month low of $920.30 an ounce as cash-rich funds sold bullion after pushing up the price to a lifetime high of $1,030.80 on Monday on record high oil and expectations of further cuts in US interest rates.

Dealers also noted buying from investors as surging oil prices elevated gold’s appeal as a hedge against inflation. India, the world’s largest consumer, was buying on dips as the busy wedding season progressed.

“I see very good investment offtake in China, Vietnam and Japan,” said Albert Cheng, managing director for Far East of the World Gold Council. Also Read “I guess in Vietnam there’s a lack of investment tools and the stock market is very jittery. So people would better put money in gold. It’s almost the end of the first quarter.

The physical demand is very good. Gold bars were offered at a premium of 10 US cents an ounce to the spot London price for the first time since last August in Singapore, a centre for bullion trading in Southeast Asia.

Gold bars were on par with London prices last week Vietnam, one of Southeast Asia’s main consumers, saw demand for investment falling more than 19 per cent to 56.1 tonnes in 2007, when gold began hitting a record high. But dealers said the Vietnamese were the most active buyers in recent weeks.

“Vietnam is buying gold even when it’s trading at record highs this month. For them it’s more for a hedge because inflation was more than 12 percent last year,” said a dealer in Singapore. “Nobody wants to keep dollars because it’s depreciating,” said the dealer, who also noted demand from jewellers in India, Indonesia and Thailand.

Gold’s drop attracted buying from jewellers in Hong Kong, a key bullion trading house in East Asia, pushing up premiums to as high as 20 US cents an ounce. Gold bars were offered at a discount of 20 cents last week. “Physical buyers and bargain hunters are buying back at the low. Everybody is rushing to buy,” said a dealer in Hong Kong.

“But I guess long-term sentiment is still bullish because the Fed may cut rates again in their next meeting in April,” he said. Gold has gained more than 23 per cent in 2008, driven by demand from investors and speculators on hopes of more U.S. rate cuts, record high oil above $100 a barrel and a struggling dollar.

“I think the factors which have brought up prices to these levels have not reversed. Market fundamentals are still very positive,” said Cheng of the World Gold Council.

The US Federal Reserve brought key interest rates to 2.25 per cent on Tuesday after cutting them by 0.75 percent, against market expectations for a 1 percentage point cut. Since September, it has cut rates by a total of 3.0 percentage points.

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