Asia Gold-Discounts narrow, slow wedding season in India

Tue Mar 31, 2009 1:34pm IST

* Discounts narrow to 25 cents in Tokyo, selling subsides

* Slow wedding demand in India

* Some investors ditch gold to buy shares

* Gold bars on par in Singapore, Hong Kong

By Lewa Pardomuan and Ruchira Singh

SINGAPORE/MUMBAI, March 31 (Reuters) - Discounts for gold bars narrowed in Japan on Tuesday after bullion's steady drop from a its highest in three weeks, while a rebound in the stock market prompted some investors to buy shares.

In India, the world's largest consumer, dealers complained about poor sales during the normally busy wedding as consumers waited for a price correction, but sales of scrap had subsided.

"There is still no buying. We feel at above $880 an ounce nothing will happen. If it falls below $850, there will be good demand," said Ketan Shroff, director of Pushpak Bullions Pvt Ltd, referring to levels last seen in January.

"Recycled gold is still being used for weddings. But otherwise demand is also less," he said.

Gold jewellery is the most common gift during religious events in India and forms an essential part of the dowry basket. The wedding season lasts until May.

Gold bars were on par with spot London prices in Hong Kong, having been offered at a discount of 50 U.S. cents two weeks ago. Sales also slowed down in Singapore, with gold trading 5 percent below a three-week high of $966.70 hit on March 20.

"For the long term, I guess many people are still positive on gold and perhaps the physical people may see this as a good opportunity for buying on dips," said Adrian Koh, analyst at Phillip Futures in Singapore.

"I still dont think we are out of the doldrums yet, for the stock market. So, that's going to cap any rise in the stock market rally," he said.

Asian stocks edged up and were poised to score their biggest monthly rise in a decade as some investors bet the most painful stretch of corporate earnings damage may be over and bought Asian technology shares. [MKTS/GLOB]

"The Tokyo stock market has dropped but compared with a few weeks ago, it's actually moving upward. Selling from the general public has slowed down recently and there's not much buying interest either," said a dealer at a bullion house in Tokyo.

"I guess as long as people believe the stock market will rebound further, they may forget about gold for a while," he said.

Gold bars were quoted at a discount of 25 U.S. cents to the spot London prices in Tokyo, compared with a discount of 75 cents, reflecting a slowdown in sales from two weeks ago. <GOLD/ASIA1>

Cash gold XAU= added $3.45 an ounce to $919.75 after Tokyo shares wiped out earlier gains. Gold has recovered about 4 percent from a six-week low of $882.90 hit on March 18, but is 9 percent off the 11-month high above $1,000 set in February.

"There's light trading and Indonesia has been on the sidelines for a week. I guess the current price is not low enough to attract buying," said a dealer in Singapore.

"We saw some buying from Thailand when the market first dropped to $930 levels but things have died down." (Editing by Ben Tan) (lewa.pardomuan@thomsonreuters.com; +65 6870 3834; Reuters Messaging:lewa.pardomuan.reuters.com@reuters.net))

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage