BEIJING: Physical gold demand eased in top consumer China this week as coronavirus-led restrictions dampened retail buying ahead of the Chinese New Year.

Dealers sold gold at anywhere between a discount of $4 and a premium of $4 an ounce over benchmark spot gold prices, versus $0.50-$4 premiums last week.

“Gold is uninteresting to Chinese investors in the current climate given its weaker returns recently. Gold premiums will neither collapse nor skyrocket,” said Bernard Sin, regional director for Greater China at MKS Switzerland.

China has imposed lockdowns and discouraged travel ahead of its Lunar New Year in early February.

“The Chinese new year is not helping demand this time,” said Ronald Leung, chief dealer for Lee Cheong Gold Dealers in Hong Kong.

An initial pick-up in buying in view of the key holiday had pushed Chinese prices into a premium for the first time in 11 months in the week to Jan. 15.

In Hong Kong, gold dealers operated between a discount of $3 an ounce and a $1.50 premium.

Singapore premiums were around $1.2-$1.8.

“We’re seeing a lot more festive buying. Many companies are also giving small gold gifts to employees,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

Interest in silver had also shot up alongside a spike in global prices, he added.

India saw modest gold demand, with retail buyers encouraged by a dip in domestic rates to their lowest in over a month earlier this week.

“People were making small jewellery purchases for weddings and even coins for the investment purpose,” said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.

Premiums rose to about $2.5 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, from $1 last week.

Jewellers were not active as many were waiting for policy decisions in the upcoming budget, due on Feb. 1, said a Mumbai-based dealer with a bullion importing bank.

The country’s gold consumption is expected to rebound in 2021, the World Gold Council said.