BENGALURU/MUMBAI (Reuters) - Gold demand was subdued in major Asian hubs this week, with India in the midst of protests against a new citizenship law that disrupted some retail buying and traders elsewhere banking on the Chinese New Year for an uptick in sales.
Dealers were offering a discount of up to $2.50 an ounce over official domestic prices this week in India, compared to $2 an ounce last week. The domestic price includes a 12.5% import tax and 3% sales tax.
“In many towns retail consumers deferred purchases due to the protests,” said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.
Gold futures were trading around 38,050 rupees per 10 grams on Friday after hitting a two-month low of 37,100 rupees earlier this month.
Jewellers have substantially reduced purchases as retail demand is expected to remain weak even next week due to holidays, said a Mumbai-based dealer with a private bullion-importing bank.
Other Asian hubs saw muted demand as well. Premiums in Hong Kong dipped to $0.20-$0.30 an ounce, compared with last week’s $0.50-$0.60 an ounce.
“There is nothing going on. It is quiet during the season for holidays,” said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd, adding that despite civic unrest easing compared with a few weeks ago, there are not many buyers.
Hong Kong has been rattled for more than six months by anti-government protests.
Protesters rallied outside diplomatic missions on Thursday to urge foreign governments to follow the United States in passing human rights bills to raise pressure on Beijing and support their pro-democracy campaign.
Top consumer China also reflected subdued demand, with Chinese gold traders offering premiums of $3-$5 an ounce over the benchmark, versus last week’s $4-$6 an ounce.
Traders hope the Chinese New Year, beginning on Jan. 25, could lift demand from the end of December.
“Probably we’ll see a pick-up in demand for the Asian region ahead of the Chinese new year,” said Brian Lan, managing director at Singapore dealer GoldSilver. “It is part of their culture to buy something for loved ones.”
Traders in Singapore offered premiums of around $0.60-$0.80 an ounce, the same as last week.
In Japan, gold was being sold at par with the benchmark rate. Buying was slight this week despite gold prices being a touch higher in Japanese yen, a Tokyo-based trader said.
Reporting by Rajendra Jadhav in Mumbai; Sumita Layek and Eileen Soreng in Bengaluru; Editing by Jan Harvey
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