“Retail buyers are not making purchases due to Adhik Maas. For the next two weeks demand will remain weak,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
Adhik Maas is an extra month in the Hindu calendar that ends on June 13. It is considered inauspicious and people avoid weddings, buying gold or property during the period.
Dealers in India were offering a discount of up to $ 4 an ounce over official domestic prices this week, down from a discount of $ 6 a week ago, the highest since March 24. The domestic price includes a 10 per cent import tax.
Gold discounts narrowed due to a correction in prices. In the Indian market, gold futures were trading at around 30,726 rupees per 10 grams, after rising to 31,620 rupees last month, their highest since August 2016.
The recent price correction failed to boost demand as jewellers were waiting for prices to stabilize, said a Mumbai-based dealer with a private bullion-importing bank.
“The rupee and global prices were quite volatile in last few weeks. Jewellers are struggling to identify the trend,” the dealer said.
The rupee has fallen over 5 per cent so far in 2018, having hit its lowest in more than 1.5 years late last month.
Demand was lacklustre in other Asian centres as well, with premiums in China, the world’s top gold consumer, easing for the second straight week to $ 4-$ 5 an ounce over the global benchmark. This compares with $ 6-$ 7 an ounce quoted last week.
“Demand has been soft without a clear direction in price… not enough to stimulate selling and a bit high to spur demand,” said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.
The global benchmark, spot gold, traded in a narrow range this week, just above the 2018 low of $ 1,281.76 an ounce hit last week.
“Gold prices are slightly higher this week and those who wanted to buy have already bought last week,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
In Singapore, premiums stood at 60 cents versus the 60 cents-to-$ 1 an ounce range quoted in the previous week.
Hong Kong premiums remained unchanged at 60 cents-to-$ 1.30 per ounce range, while gold in Tokyo quoted flat compared with the global benchmark.