BENGALURU, July 28 (Reuters) - Physical gold sales remained subdued in Asia this week as steadily higher prices kept buyers on the sidelines, but consumer appetite for the yellow metal was seen increasing in the coming weeks helped by seasonal demand.
Bullion has risen about 1.5 percent this week on expectations that the U.S. Federal Reserve will continue with its cautious stance on interest rates in the wake of economic and political uncertainty across the globe following Britain’s decision to leave the European Union.
“Prices have hit sideways, its not going much anywhere. Most people are looking to sell at such prices. Those who want to buy are waiting for prices to come lower,” said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.
However, seasonal demand in top consumers India and China would boost interest for the safe haven asset starting the middle of next month, analysts said.
Physical gold in India, the world’s second-biggest consumer, was at a discount of $52 an ounce to the global spot benchmark , lower from last week’s discounts of about $40, as retail demand was dampened with local gold prices rising over 1 percent this week.
Buying interest has split into various avenues in bullion with investors looking beyond jewellery and opting for government gold bonds, said Geojit BNP Paribas Research Head V. Hareesh.
“Jewellery demand is quite weak right now. From mid-August small festivals are starting and demand will also improve gradually,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
The fourth quarter usually accounts for about a third of India’s gold sales as it takes in the start of the wedding season as well as festivals like Dhanteras and Diwali, when buying gold is considered auspicious.
Physical demand in top-consumer China and Hong Kong remained muted.
“Depending upon the prices, we may see some seasonal demand picking up in the middle of August,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Despite the tepid demand, the metal was being offered at a premium of $1 to $2 an ounce in China and 20 to 60 cents in Hong Kong. Gold prices in China were flat against the global spot price last week, and at a discount of 30 to 80 cents in Hong Kong.
Bullion continued to be available at a $1 an ounce discount in Tokyo and at a premium of 60 cents in Singapore this week. (Additional reporting by Rajendra Jadhav in Mumbai; Editing by Christian Schmollinger)
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