Gold buying slows after Akshaya Tritiya
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India's gold buying ebbed after the last key gold-purchasing festival of the wedding season earlier this week, while the listless performance in gold prices deterred interest of buyers elsewhere in Asia.
Gold has been drifting between $1,620 and $1,680 over the past month or so, grinding off much of the trading interest as uncertain economic outlook fails to provide any clue on the direction of trading.
"Indian buying slowed since the festival ended, while the Chinese are not doing much ahead of next week's holiday," said a Singapore-based trader.
Akshaya Tritiya, the second-biggest gold-buying festival after Dhanteras in India, failed to attract the usual massive gold buying, as Indian consumers struggle with rising living costs while high bullion prices dented appetite for the precious metal, a popular choice of gift at weddings and festivals.
India's gold buying picked up earlier this month after a three-week strike by jewellers closed the tap on the gold flow into the world's biggest consumer of bullion.
India's next gold-buying season will start after the monsoon season ends in September, before which only a small amount of gold buying will trickle in, the trader added.
Spot gold hit a two-week high of $1,660.60 in the previous session, but the effort to break higher soon fizzled and prices were trading near $1,650 on Friday.
In Singapore, gold bar premiums were around $1 an ounce above London prices. In Hong Kong, premiums were quoted in the range between $1 and $1.60 an ounce, little changed from a week earlier, dealers said.
"People don't have much confidence that prices will move higher once we approach $1,660-$1,670 level," said a Hong Kong-based dealer, adding that trading volume has been sluggish as speculators shift interest to better-performing markets, such as equities.
Dealers said buying interest will emerge if prices fall to the $1,620 level.
WEEK AHEAD
The physical market may see thin volume next week due to public holidays in various Asian countries. China's markets will be closed on Monday and Tuesday, and Japan with shut on Thursday and Friday.
Copyright @ Thomson Reuters 2012