Gold demand in India rose this week due to a festival and as local prices adjusted to an appreciating rupee, while higher prices kept a check on demand elsewhere in Asia.
The Gudi Padwa festival, also known as Ugadi in some parts of the country, was held earlier this week. Buying gold during festivals is considered auspicious in the world’s second-biggest market.
“Retail demand improved due to Gudi Padwa and a drop in prices,” said Mukesh Kothari, director at bullion dealer RiddiSiddhi Bullions in Mumbai.
“There is not too much demand in China or Hong Kong … even in the $1,230 range the market seems not prepared to buy on the physical side,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Premiums in China had risen early this month as traders said supplies of the precious metal were limited due to tightening import restrictions to stem currency outflows.
Premiums were quoted in a 70 cents to $1 range in Hong Kong, mostly unchanged from last week.
In Japan, traders saw the precious metal at a discount of $1, due to lack of any significant demand.