Asia Gold: Volatile prices dim Indian sales; silver shines in some hubs

Physical gold demand eased this week in India as volatility in domestic prices put off buyers, while interest for silver remained strong in Singapore and Japan.

Activity in top hub China, meanwhile, was subdued due to the Lunar New Year holiday.

Local gold futures in India slipped to around 47,300 rupees per 10 grams on Friday, after rising above 48,000 rupees earlier this week. Last week, prices fell to a near eight-month low of 46,600 rupees.

"Prices are attractive, but consumers are hoping they could fall further. They are delaying buying," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.

Dealers charged premiums of about $5 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, versus last week's $6 premium, a six-month peak.

Jewellery demand is quite volatile, but investors are taking advantage of lower prices, said a Mumbai-based dealer with a bullion importing bank.

Chinese customers were charged premiums of $5-$8 an ounce over benchmark spot rates..

The retail market was quiet ahead of the holiday, but some investor activity on the Shanghai Gold Exchange lifted premiums, Peter Fung, head of dealing at Wing Fung Precious Metals, said.

In Hong Kong, dealers sold bullion between a discount of $3 an ounce and a $1 premium.

In Singapore, premiums of $1.4-$1.8 were charged.

Retail buying increased due to Chinese New Year gifting after a slow start this week, said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

Vincent Tie, sales manager at another Singapore dealer, Silver Bullion said interest in silver remained resilient.

Silver has seen an influx of fresh interest, following a brief spike in spot prices triggered by a retail frenzy last week, with analysts also betting on a further upside this year from industrial demand.

Japanese buyers too bought silver, dealers said. Gold premiums in Tokyo were around $0.50-$1 an ounce.