* Key Indian gold buying festival failed to revive gold demand
* China’s jewellery consumption slumped 65% in Q1- WGC
* China and Hong Kong closed for Labour Day holiday
* Benchmark spot gold prices on track for worst week in six
BENGALURU/MUMBAI, May 1 (Reuters) - Physical bullion demand was steady in Singapore this week as investors sought cover from economic uncertainties due to the coronavirus, while activity wound down in top hub China ahead of a public holiday.
Dealers in Singapore sold gold at average premiums of about $1.50 an ounce over benchmark spot prices.
“The world is beginning to count the damage in the real economy from the lockdowns and the real losses of jobs and business closures cannot be solved by central bank money printing this time,” said Vincent Tie, sales manager at Silver Bullion.
“Given this bleak outlook in the near term, investors are buying gold anticipating higher prices.”
However, restrictions kept buyers away from shops, resulting in elevated premiums on retail gold, traders said.
There is safe-haven demand, “but people are holding onto what gold they have right now,” said Spencer Campbell, director at SE Asia Consulting Pte Ltd.
Global spot prices fell below $1,700 an ounce en route to their worst week in six as economies eased lockdowns.
There has also been good demand for platinum recently, said Brian Lan, of Singapore dealer GoldSilver Central, adding however that liquidity was thin.
In China, bullion was still sold at hefty discounts of about $48 an ounce. Activity in both China and Hong Kong was further muted due to the May day holidays.
“Demand is still weak, but the selling pressure has eased a little. People who hold gold do not want to clear their stocks,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
While most retailers and dealers reopened, order books were thin, Li added.
The World Gold Council said on Thursday that China’s jewellery consumption, which slumped 65% in the first quarter of this year, could find support in the second quarter and beyond from government policies and promotions by jewellers.
In India, physical trading remained on hold due to the national lockdown, and a key gold buying festival of Akshaya Tritiya on April 26 failed to help revive appetite for the metal.
“Despite all the hype, only a handful of buyers made online purchases. Most potential customers avoided online buying due to volatility in prices and the uncertainty over delivery after the lockdown,” said a Mumbai-based dealer with a private bullion importing bank.
In Japan, gold was sold at anywhere between at par with the benchmark to a $0.50 an ounce premium. (Reporting by Asha Sistla and K. Sathya Narayanan in Bengaluru and Rajendra Jadhav in Mumbai; editing by Arpan Varghese and Susan Fenton)
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