MUMBAI, BENGALURU

Gold demand picked up in most Asian centres last week as prices of the yellow metal slid to a six-month low, with gold being sold at a premium in India for the first time in seven weeks.

Spot gold touched its lowest since December 19 at $1,260.84 an ounce on Thursday, weighed down by outlook for higher interest rates in the United States and as the dollar climbed to an 11-month peak. It rose on Friday, but the modest nature of the recovery suggested speculators might still be poised to punish the metal further.

Spot gold gained 0.2 per cent at $1,268.76 per ounce by 1:34pm EDT (1734 GMT), headed for a 0.8 per cent weekly drop. In the prior session, bullion touched $1,260.84, its lowest since December 19, 2017.

US gold futures for August delivery settled up 20 cents, 0.02 per cent, at $1,270.70 per ounce.

“Demand has improved slightly due to the correction, but still many buyers are waiting for prices to fall further,” said Ashok Jain, proprietor of Mumbai-based wholesaler Chenaji Narsinghji.

In the Indian market, gold futures were trading at around Rs30,562 per 10 grams, down nearly 3 per cent from last week’s peak of Rs31,424.

Dealers in India were charging a premium of up to $1 an ounce over official domestic prices last week, for the first time since the week of May 4. Last week, they were offering a discount of up to $7.5, the biggest since September 9. The domestic price includes a 10 per cent import tax.

“Many jewellers are postponing purchases expecting prices could fall below $1,250 [an ounce],” said a Mumbai-based dealer at a private bullion importing bank.

In Singapore, premiums charged last week rose slightly to a range of 80 cents to $1 over benchmark spot, from the 60 cents to $1 range last week.

“We see quite good demand [in Singapore]. Individuals and businesses are picking up gold because now it is cheaper than before,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

In Japan, gold was being sold at a premium of about 25 cents last week after being sold at par with the global benchmark for several weeks.

In top consumer China, however, premiums were unchanged from the previous week at $5-$6 an ounce as demand remained quiet amid a weaker yuan, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Premiums in Hong Kong ranged between 50 cents and $1.20 last week, little changed from last week’s 60 cents to $1.30 range.