Asia Gold Price dip sparks buying in key hubs, China premiums firm

NEW YORK (Feb 10) Physical gold buyers in some Asian hubs were drawn to a dip in domestic prices this week, while central bank demand kept premiums firm in China.

Local gold prices in India hit as low as 56,496 rupees per 10 grams from an all-time high of 58,826 rupees climbed last week.

Demand from jewelers and retail consumers has improved because of the price correction, said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.

Dealers offered discounts of up to $18 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — down from last week's $48 discount.

"After two months, there's some momentum in the market. Many buyers who postponed purchases hoping for a reduction in the import duty will start purchases if prices fall further," a Mumbai-based dealer with a private bank said.

India did not slash the import duty on gold in its annual budget presented on Feb. 1, despite demands from the bullion industry, but instead raised the duty on silver.

Reuters