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 USD 2.50 an ounce over official domestic prices this week in India, compared to USD 2 an ounce last week. The domestic price includes a 12.5per cent import tax and 3per cent 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 USD 0.20- USD0.30 an ounce, compared with last week’s USD 0.50-USD 0.60 an ounce.