Feb 3 (Reuters) - Physical gold demand in India ticked up this week, as jewellers resumed purchases after staying away for a couple of weeks hoping for an import duty cut in the government budget amid the wedding season.
"Jewellers were not buying for few weeks anticipating government will cut import duty in the budget. As there wasn't any change in the duty structure, they have started buying small quantity," said Harshad Ajmera, a gold wholesaler in Kolkata.
India did not slash import duty on gold in its annual budget presented on Feb. 1, but raised the import duty on silver. read more
Bullion industry was seeking a reduction in the duty as gold refiners have nearly stopped imports of gold dore, a semi-pure alloy, as grey market operators offer hefty discounts to market rates and cut into their slender margins. read more
But retail demand was still muted as consumers were struggling to digest record high prices, said a Mumbai-based dealer with a private bullion importing bank.
Local gold prices hit an all-time high of 58,826 rupees per 10 grams this week. This prompted dealers to offer discounts of up to $48 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — mid-week, from last week's $42 discounts.
But discounts eased to around $14 on Friday.
In China, premiums of $10-$15 an ounce were quoted over benchmark prices as markets reopened after the week-long Lunar New Year holidays.
"We will continue to see the strengthening of RMB, hence, premium in China in near term is unlikely to fall," said Bernard Sin, regional director, Greater China at MKS PAMP.
In Hong Kong, gold was sold at par to $2 premiums an ounce , while Singapore dealers charged $1-$2.20 premiums , with higher domestic prices denting appetite, traders said.
Gold changed hands at $0.50 discounts to $0.50 premiums in Japan.
