MUMBAI/BENGALURU, Nov 17 (Reuters) – Gold prices in India traded at a discount for the first time in six weeks as the key wedding season failed to spur fresh demand, while high prices curbed appetite for the precious metal in major Asian centres except China.
Gold is considered an essential part of weddings in India, the world’s second-biggest consumer after China, and it is a popular gift for special occasions.
Dealers in India were offering a discount of up to $2 an ounce this week over official domestic prices, compared to a $2 premium last week.
“After Diwali festival, the market relies on wedding season demand. This year, it has been weak so far. Retail purchases are lower than normal,” said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
“Since retail demand is weak, jewellers are not restocking. They are waiting for a price correction,” said a Mumbai-based dealer with a private bank.
India’s gold consumption is likely to drop to its lowest in eight years in 2017, the World Gold Council said last week.
In China, gold was sold at a premium of $7-$10 an ounce over the global spot benchmark, up from last week’s $5-$7, underlining firm demand.
“Flows to China have been strong in the last few weeks after a weak couple of months. Elsewhere, demand for physical has eased as gold prices have tracked a little higher,” said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.
Spot gold was on track for its second straight weekly gain, having traded in a tight $1,270.56-$1,289.09 an ounce range amid a weaker dollar.
Premiums in Hong Kong were at $1-$1.20 an ounce versus last week’s 60 cents-$1.20 range, while in Singapore, premiums slipped to 50-60 cents from 70-90 cents, traders said. In Japan, gold continued to be sold at par with the global spot price.
“Gold didn’t create too much interest for fresh buying this week in Asia since it was trading within a $20 range for most of the week,” said a Singapore-based dealer at a bank. A price drop towards $1,250 would entice buyers, she said.
(By Rajendra Jadhav and Arpan Varghese; Additional reporting by Vijaykumar Vedala Editing by Manolo Serapio Jr.).