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Asia Gold-India dealers hope for wedding rush as price dip sparks demand

·2-min read

* India discounts narrow to $1/oz

* China premiums at $4-$5 an ounce

* China's imports via Hong Kong jump 56% in October

By Rajendra Jadhav and Nakul Iyer

Nov 26 (Reuters) - Physical gold demand picked up in major Asian hubs this week helped by a retreat in prices, with dealers in India prepared for a likely spurt in buying as the wedding season gathers pace.

With a correction in prices during the first half of the week, "jewellers have been making purchases at lower levels as they are witnessing healthy retail demand for weddings," said a Mumbai-based bullion dealer with a private bank.

Local gold futures fell to 47,253 rupees earlier this week, the lowest in a fortnight.

Dealers offered discounts of up to $1 an ounce over official domestic prices — inclusive of 10.75% import and 3% sales levies — down from the prior week's $2 discounts.

Gold has traditionally been an integral part of weddings in India, the world's second biggest bullion consumer after China.

Lower prices drove a slight pick up in China and Japan as well.

Chinese customers were charged premiums of $4-$5 an ounce over benchmark spot prices, versus last week's $1-$4.

The country's monthly net gold imports via Hong Kong jumped 56% in October to the highest since June 2018.

Peter Fung, head of dealing at Wing Fung Precious Metals, said Chinese demand should remain healthy as Christmas approaches, adding a dip in global rates below $1,800 an ounce has prompted a pick in purchases.

"Demand has recovered a bit in Hong Kong as well, we can see more interest in jewellery," Fung added.

Premiums of $1 per ounce were charged in Hong Kong.

Meanwhile, the Singapore gold market has been very sluggish this week tracking a soft assets markets and the sharp selloff in equities, said David Mitchell, managing director at Indigo Precious Metals.

But gold prices are likely to be strong into January driven by seasonal factors, said David Mitchell, managing director at Indigo Precious Metals. (Reporting by Rajendra Jadhav in Mumbai, Nakul Iyer, Arundhati Sarkar and Asha Sistla in Bengaluru; Editing by Shailesh Kuber)

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