Physical gold demand lacked vigour in most Asian hubs this week amid a slight dip in prices, while the yellow metal switched to a premium in India for the first time in over 1-1/2 months due to a correction in local rates, reports Reuters
In India, dealers were charging a premium of up to $1.0 an ounce over official domestic prices. This compared to a discount of $1.0 last week as the country celebrated the annual Akshaya Tritiya festival, when buying gold is considered auspicious.
However, retail demand in India, the second-biggest gold consumer after China, remained subdued.
"Many retail consumers made purchases last week during the Akshaya Tritiya festival. Now retail buying is weak," said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in Chennai.
In the local market, gold futures were trading at around 31,186 rupees per 10 grams, after rising to 31,620 last week, their highest since August 2016.
"Jewellers were waiting for a price correction. As prices are falling, they could start replenishing inventory in coming weeks," said a Mumbai-based dealer with a private bullion-importing bank.
Meanwhile, physical gold markets remained quiet in most other Asian regions, except for Singapore, which saw a slight pick-up in buying.
Benchmark spot gold prices were on course for an over 1 per cent decline this week, pressured by a thaw in tensions on the Korean peninsula and a stronger dollar as investors looked to riskier assets such as equities.
Another report from Goa adds: Indian Commodity Exchange (ICEX) plans to start trading a gold coins futures contract to cater traders in smaller cities in association with the Bombay Bullion Association in the next two months, the head of the bourse and trade body officials said on Friday.
"We are in the process of creating a platform for major refiners on which they can offer their products. We expect more Indian refiners to participate in the delivery process," Sanjay Chandel, CEO of ICEX, told Reuters on the sidelines of a gold conference.
The exchange at present offers futures trading of two gold contracts of 1.0 kilogramme and 100 grams denominations.