Physical gold demand lacked vigor this week in top Asian hubs as high domestic prices suppressed appetite for the metal, with prices in India swinging to a discount for the first time in three weeks.
"Wedding season demand has been waning and retail consumers are waiting for a correction in prices," said Mukesh Kothari, director at Mumbai bullion dealer RiddiSiddhi Bullions.
Dealers in India were offering a discount of up to $1 an ounce from official domestic prices this week, compared with a premium of $1.50 last week.
"The depreciating rupee is making gold expensive for Indian consumers. Jewelers are confused about the price trend and waiting for prices to come below 31,000 rupees," said a Mumbai-based dealer with a bullion-importing private bank.
In the Indian market, gold futures were trading at about 31,498 rupees per 10 grams, having hit 31,620 rupees last month, the highest level since August 2016.
India's gold imports were down year on year for a fourth straight month in April, dropping to 57 tonnes on subdued demand after local prices jumped, provisional data from precious metals consultancy GFMS and bank dealers showed.
Demand also remained subdued in most other Asian hubs.
There was some moderate buying when prices were around the $1,310 range, but people are hesitating to make purchases around the $1,320 levels, said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Benchmark spot gold was on track to register a weekly gain of about 0.7 percent, having traded between $1,304.11 and $1,325.06 an ounce.
In top consumer China, premiums of about $6 to $8 an ounce were being charged, down from $8-$9 last week. In Hong Kong, premiums were unchanged at between 50 cents and $1.50.
"Demand was average, not as good as last week ... In Singapore dollars, gold is more expensive," said Brian Lan, managing director at dealer GoldSilver Central in Singapore, adding that premiums in the region were unchanged from last week at 80 cents.
"Moving forward, I think we might see more demand from Malaysia because gold is seen as a hedge against political instability."
Malaysian markets were closed on Thursday and Friday and will reopen on Monday, but overseas investors were nervous about the ousting of Prime Minister Najib Razak after a decade in office.
Demand in Japan remained subdued against the backdrop of high domestic prices, one Tokyo trader said, adding that gold continued to be sold at par with the global benchmark in Japan.
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