Off The Wire
Asia Gold-High prices keep demand in check, Indian jewellers stock up for festival
By Rajendra Jadhav and Arpan Varghese
BENGALURU/MUMBAI, March 24 (Reuters) - An uptick in prices kept a lid on demand for gold in most regions across Asia this week, while in India, an upcoming festival saw jewellers stocking up on the metal.
The spot gold international benchmark is set for a second week of gains, with prices supported by uncertainty surrounding U.S. President Donald Trump's economic policy and concerns over the outcome of elections in Europe. "Demand has been sluggish this week, especially with (international) gold prices in the $1,240 to $1,250 range," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
In top consumer China, premiums fell to about $10 to $12 an ounce against the international benchmark from levels over $20 last week.
Traders attributed the drop in premiums to a rise in prices.
Premiums in China had risen last week as traders said supply of the precious metal was limited due to tightening import restrictions to stem currency outflows. Premiums were quoted in a 70 cents to $1.20 range in Hong Kong, from the 70 cents to $1.10 an ounce level seen last week.
In Singapore, premiums were seen slightly lower, within the 80 to 90 cents range, against $1.20 an ounce in the week before.
In Japan, traders saw the precious metal at a discount of 50 cents to a dollar, unchanged from last week, attributing it to the lack of any significant move in local prices.
Gold demand in India, the world's second-largest consumer of the metal, improved this week despite a price rise as jewellers stocked up for a festival next week.
"Due to Gudi Padwa festival, sentiments have improved. Festival demand has been trickling in," said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in Chennai.
In the local market, gold futures were trading around 28,700 rupees per 10 grams on Friday, up 1 percent from a week ago.
"There is pent up demand and the money squeeze due to demonetization has come to an end," said Ishu Datwani, owner of Mumbai-based Anmol Jewellers.
The appreciation of the rupee to the highest level in nearly 17 months has made the price rise in other markets less painful for Indian consumers, a Mumbai based dealer with a private bank said.
(Reporting by Arpan Varghese in Bengaluru; editing by Susan Thomas)