MUMBAI/BENGALURU (Reuters) - Physical gold demand was soft in major Asian hubs this week with global prices moving in a tight range, while lower retail purchases forced sellers in India to offer wider discounts during a slow period for buying the metal.
Benchmark spot gold prices have moved little since last Friday’s close, with the spread between its highs and lows the narrowest of any week since August 2007, at just $13.70 an ounce.
Investors were also cautious before Group of Seven summit, the U.S. Federal Reserve policy meeting and the U.S.-North Korea summit in Singapore next week.
“People are waiting to see what will happen at the summit before they make a move to sell or buy gold,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
In top consumer China, premiums were at around $5-$7 an ounce over the benchmark, versus $4-$5 last week.
Premiums in Singapore and Hong Kong were unchanged from last week, at 60 cents per ounce and 60 cents-$1.30 an ounce, respectively.
In Japan, demand for gold was tepid and prices remained at par with the global benchmark, traders in Tokyo said.
Meanwhile, dealers in second biggest gold consumer India were offering a discount of up to $5 an ounce, up from the $4 discounts a week earlier. The domestic price includes a 10 percent import tax.
“Retail buying is negligible due to Adhik Maas. Jewellers are also not buying due to higher prices,” said the head of bullion division at a Mumbai-based private gold importing bank.
Adhik Maas is an extra month in Hindu calendar that ends on June 13. The month is considered inauspicious and people avoid weddings, buying gold or property during the period.
In the Indian market, gold futures were trading at about 31,300 rupees per 10 grams, not far from 31,620 rupees hit in April, their highest since August 2016.
“In June-July, demand will remain weak. If monsoon delivers good rainfall, then from August onward demand could improve,” said Surendra Mehta, secretary of the India Bullion and Jewellers Association.
Two-thirds of India’s gold demand comes from rural areas, where jewellery is a traditional store of wealth.
The country is likely to receive average monsoon rains in 2018, the India Meteorological Department said last week, potentially raising farm and economic growth in Asia’s third-biggest economy.
Reporting by Rajendra Jadhav in Mumbai and Swati Verma in Bengaluru; Editing by Edmund Blair