Gold demand in India stayed muted this week as prices hit record highs again, taking the shine off retail buying, while bullion traded at a premium in China as demand remained steady ahead of the Lunar New Year.

Indian dealers offered a discount of up to $12 per ounce to official domestic prices this week, inclusive of 6% import and 3% sales levies, down from the last week's premium of up to $6.
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Domestic gold prices were trading around 142,800 rupees ($1,575.10) per 10 grams on Friday, not far from the record high of 143,590 rupees hit earlier this week.

"Demand just isn't there right now since prices keep hitting new highs," said Chirag Thakkar, CEO of bullion importer Amrapali Group Gujarat.

"Most of the buying is only in gold exchange-traded funds (ETFs), with just a little interest in coins and bars. Jewellery demand is pretty much dead," said a Mumbai-based bullion dealer with a private bank.

In top consumer China, bullion traded anywhere from discounts of $12 to premiums of $3 an ounce to the global benchmark spot price this week. That compares with premiums as high as $21 last week.

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"China's heading into the Chinese New Year, and despite the record prices, gold remains at a modest premium, (which is surprising) bearing in mind that Asian demand is normally very price-sensitive and record highs would normally curtail any kind of physical uptake," said independent analyst Ross Norman.

In Singapore , gold was sold at prices ranging from a $0.20 discount to premiums of up to $2 an ounce.

In Hong Kong, gold traded at par to premiums of $4, while in Japan, bullion was sold at discounts of $6 to a $1 premium, same as last week.

International benchmark spot gold prices were headed for a weekly gain after hitting a record high of $4,642.72/ounce on Wednesday.
"The market remains hot from a physical and retail perspective, whether you're talking China or Europe or (even)Australasia," Norman said.

Courtesy: Reuters