Physical gold demand in most Asian hubs was muted this week, weighed down by stronger prices, despite a slight pick-up in buying in India ahead of the wedding season and a key festival. This month Indians will be celebrating the annual festival of Akshaya Tritiya, when buying gold is considered auspicious.
"Jewellers want to build inventory for Akshay Tritiya, but due to the price rise they are postponing purchases," said a Mumbai-based dealer with a private bank. Dealers in India were offering a discount of up to $3 an ounce on official domestic prices this week, unchanged from the last week. The domestic price includes a 10 percent import tax.
In the local market, gold futures closed at 30,500 rupees ($468.71) per 10 grams on Wednesday, after hitting an over one-year high of 30,995 on Monday. "Retail buying has improved due to wedding season, but still demand is lower than last year due to price rise," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in Kolkata, India.
Benchmark spot gold prices touched a week high of $1,348.06 per ounce on Wednesday as the dollar dipped versus the yen after China retaliated against a US move to slap tariffs on $50 billion worth of its imports. Meanwhile, demand for gold in other Asian centres was quiet this week due to holidays in China and Thailand. Premiums in top consumer China hovered around $7 to $8, little changed from the previous week.
"This is a short week in China due to the Qingming festival. There is not much activity in the market," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. In Hong Kong, premiums were steady at 60 cents to $1.20 an ounce, while in Singapore premiums narrowed to 40-50 cents from 60-80 cents charged last week.
"If we see prices go down below $1,300 or move up above $1,350 then probably we will see some demand," a Singapore-based banker said. Gold was being sold at par with the global benchmark in Japan this week, a Tokyo-based trader said. Premiums were at 25 cents last week.
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