| MUMBAI/BENGALURU, Sept 9
MUMBAI/BENGALURU, Sept 9 Gold demand in Asia
remained subdued this week as higher prices kept buyers at bay,
but upcoming festivals following a good monsoon in India would
likely stimulate appetite for the yellow metal.
The safe-haven bullion has risen nearly 1 percent this week
after weak U.S. jobs data last week lowered expectations of an
imminent September rate hike by the Federal Reserve.
"In previous years, physical demand was driven by Asian
demand, this does not appear to be the case this year. Key will
be whether Indian and Chinese retail demand returns," analysts
at ScotiaMocatta said.
"In India, demand for physical gold and jewellery in the
months ahead are expected to benefit from a good monsoon."
Two-thirds of demand in India, the world's second-biggest
gold consumer, comes from its rural areas and villages, where
jewellery is a traditional form of investment.
Discounts over official domestic prices in India doubled
this week to $32 an ounce as compared to last week on the back
of sluggish retail buying.
"Last week demand was good, but the recent price rise again
moderated demand," said Harshad Ajmera, proprietor of JJ Gold
House, a wholesaler in the eastern Indian city of Kolkata.
Gold prices in India have risen 1.5 percent so far
this month and were trading around 31,200 rupees per 10 grams on
"Retail buyers are not comfortable in paying above 31,000
rupees. They are waiting for a price correction," he said.
Demand for gold is expected to strengthen in the final
quarter as India gears up for festivals such as Diwali and
Dussehra, when buying the metal is considered auspicious.
Premiums in top consumer China varied between $1 and $1.50
an ounce to the spot benchmark, down from $3-4 last week.
"In China, concerns about the weakening yuan may well prompt
a pick-up in buying of gold as a hedge against a depreciating
currency," ScotiaMocatta analysts said in a note.
Gold was sold within a premium range of 0-60 cents an ounce
in Hong Kong, almost unchanged from last week.
"Usually there is good demand during September, but not this
time due to higher prices. Prices need to come below $1,300 to
attract demand," said Ronald Leung, chief dealer at Lee Cheong
Gold Dealers in Hong Kong.
In Singapore, premiums were about 50-60 cents, slightly
lower than last week's 60-70 cents.
The Tokyo market, too, remained quiet as public interest was
very limited this week, keeping the premium at zero, traders
(Writing by Koustav Samanta in Bengaluru; Editing by Sunil