BENGALURU/MUMBAI (Reuters) - Gold was sold at a discount to official prices in India this week for the first time in six weeks, while demand elsewhere in Asia remained subdued as surging bullion prices turned off buyers.
“Physical buying was very weak as prices jumped from around $1,250 this week. People are not interested in chasing prices at these levels and retail buying will pick up only around $1,200 levels,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
“The holiday mood also weakened buying ahead of Easter.”
Spot gold jumped to five-month highs as a sagging dollar and geopolitical tensions burnished the yellow metal’s safe-haven appeal.
Dealers in India, the world’s second-largest consumer of the metal, were offering a discount of up to $1 an ounce this week over official domestic prices. Dealers were charging a premium of $1 last week. The domestic price includes a 10 percent import tax.
“Jewellers have already stocked up for Akshaya Trititya festival. They are waiting for a price correction,” said a Mumbai-based gold dealer with a private bank.
In the last week of April, Indians will celebrate Akshaya Trititya, when buying gold is considered auspicious.
“Sentiments have improved after the shock of demonetisation. We are expecting good demand during Akshaya Trititya,” said Aditya Pethe, a director at Waman Hari Pethe Jewellers in Mumbai.
In local markets, gold futures were trading around 29,300 rupees per 10 grams, up 2 percent from a week ago. It has risen nearly 5 percent in four weeks.
The Indian rupee has risen 5.5 percent against the U.S. dollar so far in 2017, partly offsetting the rally in overseas gold prices.
Easing demand this week in top consumer China narrowed gold premiums to $6-$7 an ounce over international spot prices, compared with the $10 to $12 levels quoted last week.
Among other gold trading centres, premiums in Singapore were seen at $1.20 to $1.50, unchanged from last week, and Hong Kong premiums fell to around 60 to 90 cents from 70 cents to $1 an ounce seen last week.
Prices in Japan were at a discount of around 50 cents an ounce.
Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu