Lower gold prices fail to spark post-Diwali lull in demand

Bengaluru/Mumbai (Reuters): The physical gold market remained quiet in most Asian centres this week despite a drop in prices.

Gold prices in India slipped to 29,209 rupees per 10 grams on Friday, the lowest level in about two months.

“In Singapore, several businesses in the region referred to as ‘Little India’ have said that the festival sales were not great and that it had come down when compared to the Diwali season in the last two years,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

“There are sporadic large transactions, by buyers who take advantage of the price level and the low premiums, but overall, the market is quiet,” said Joshua Rotbart, managing partner of J. Rotbart & Co in Hong Kong. In top consumer China, premiums of $6.5-$10 an ounce were being charged over the benchmark, compared with $8-$12 in the previous week. “There has been some amount of buying in China,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. He, however, said there seems to be a shift toward stocks rather than gold in terms of investments.

In Japan, gold continued to be sold flat versus the benchmark due to a lack of momentum in local rates.