Asia Gold-India in mood to buy, price drop entices jewellers

By Lewa Pardomuan

SINGAPORE, April 24 (Reuters) - Jewellers took advantage of a drop in gold prices to stock up, with main consumer India abuzz with activity during the wedding season and ahead of a religious festival, dealers said on Thursday.

In other parts of Asia, the bullion trading cities of Hong Kong and Singapore noted steady buying from jewellers in Indonesia, Thailand and Vietnam. Dealers in the Middle East also reported physical buying, albeit limited.

Gold <XAU=> hovered around $904.05 an ounce, down 5 percent from last week's three-week high of $952.60 an ounce and well below an all-time high of $1,030.80 hit in March 17.

"Since the market traded back below $950, it seems like for the last two, three weeks, the demand in Asia is quite good," said Ellison Chu, senior manager at Standard Bank London in Hong Kong.

In addition to purchases from jewellers, the market also saw demand from investors, said Chu, who quoted gold bars at a premium of between 10 to 20 U.S. cents to the spot London prices, steady from last week.

A drop in bullion's prices stirred up trading in India during the wedding season, when gold jewellery is presented as a gift at Hindu marriages. The Akshaya Tritiya festival due on May 7 has also attracted buying from jewellers, said dealers.

Akshaya Tritiya, south India's biggest gold buying festival, is an auspicious day when purchases of precious metals are believed to bring lasting prosperity.

"This could have a positive impact on prices and could also boost physical purchases in India and Middle East. The demand has been better after gold slipped back below $950," said Pradeep Unni, analyst at Vision Commodities Services in Dubai.