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Indian jewellers slow purchases as retail demand dwindles
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Gold sold between flat to $12/oz premiums in China
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Japanese customers selling to cash-in on price surge -
dealer
By Rajendra Jadhav and Arundhati Sarkar April 6 (Reuters) - Physical gold demand in key Asian hubs hit a pause this week with high domestic prices forcing dealers in some markets to lure customers with discounts.
Benchmark spot rates staged a strong rally this week, breaking above $2,000 an ounce on growing fears of an economic slowdown. "Physical sales are down across the globe, and this is seeping into Asia. Demand is starting to taper at higher price levels," said Joseph Stefans, group head of trading, MKS PAMP. Demand in other hubs like Hong Kong has also significantly dropped, and will probably not reemerge unless prices fall, Stefans added. In top buyer China, the bullion changed hands at anywhere between on par with global benchmark spot prices to $12 an ounce premiums. Chinese dealers offered discounts for the first time in months last week. Hong Kong and Singapore traders sold bullion in a range of $2 an ounce discounts to $2 premiums over the global spot rates. Demand stayed muted in India as well after local gold prices surged to a record high of 61,399 rupees per 10 grams this week.
"For Indian consumers, 60,000 rupees is a psychological barrier. Retail buyers are not willing to buy above this mark," a Kolkata-based bullion dealer said.
Dealers offered discounts of up to $32 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — versus last week's $26 discounts. Jewellers across the country have been reporting a sharp slowdown in retail buying, which is also prompting jewellers to go slow on purchases, said a Mumbai-based bullion dealer with a private bank. Some Japanese dealers also sold bullion at a discount of $1, while others charged $0.5 premiums as prices soared in local currency. Retail customers are selling at these levels to take profit, a Tokyo-based trader said. (Reporting by Arundhati Sarkar, Kavya Guduru in Bengaluru, Rajendra Jhadav in Mumbai; Editing by Nivedita Bhattacharjee)
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