MUMBAI: Top Asian hubs saw muted demand for physical gold last week in the wake of Lunar New Year holidays, while demand slightly improved in major consumer India as jewellers raised purchases for the wedding season.

       “Many jewellers were not buying before the budget, anticipating change in duty structure. These jewellers are making purchases now,” said a Mumbai-based bullion dealer with a private bank.

       Dealers were offering a discount of up to US$1.50 (RM6.26) an ounce over official domestic prices – inclusive of the 10.75% import and 3% sales levies – this week, down from the last week’s discount of US$3 (RM12.53).

       Jewellers are expecting weddings to pick up in coming months as coronavirus cases are falling in most states and this could allow the government to remove restrictions, said a New Delhi based bullion dealer.

       Markets in top consumer China are closed for a week-long Lunar New Year holiday.

       After seeing a healthy demand in the lead-up to the Lunar New Year, demand will likely soften “after the festival-related buying eases, unless inflationary concerns stoke appetite to buy,” Standard Chartered said in a note this week.

       Hong Kong saw premiums of around US$0.50-US$1.80 (RM2.08-RM7.52) an ounce over benchmark rates in a holiday-thinned week.

       “In Hong Kong, the market is very quiet and steady. We don’t see any special interest in the physical demand because it’s the first day after the Lunar Year holiday and people are still in the holiday mood,” said Peter Fung, head of dealing at Wing Fung Precious Metals.

       Singapore premiums rose to US$2-US$2.50 (RM8.35-RM10.44) per ounce from about US$1.50-US$1.80 (RM6.26-RM7.52) last week.

       Prices rose on the back of low wholesale and refinery inventories, which are expected to pick up as markets open up after the holidays, said Brian Lan, managing director at dealer GoldSilver Central. — Reuters