By Nithin ThomasPrasad and Rajendra Jadhav
BENGALURU/MUMBAI (Reuters) - Physical gold demand in Asia picked up towards the end of the week, as a pullback in prices spurred purchases ahead of the Lunar New Year in China and the wedding season in India.
Spot gold has declined about 1 percent so far this week and was headed for a second straight weekly drop due to a recovery in the dollar.
"Retail buyers are comfortable with the current price range," said Aditya Pethe, a director at Waman Hari Pethe Jewellers in Mumbai.
Local gold prices have declined more than 2 percent since rising to 30,720 rupees per 10 gram last week, the highest since Nov. 9, 2016.
Dealers were charging a premium of up to $1.5 an ounce on Friday over official domestic prices, down from $2 last week. The domestic price includes a 10 percent import tax.
"Demand is not great but the market is still in premium due to limited supplies.
Imports were lower last month," said a Mumbai-based dealer with a private bank.
India's gold imports in January dropped 37 percent from a year earlier to their lowest in 17 months as buyers postponed purchases in expectation of a cut in the import tax.
Gold demand in India is likely to remain below its 10-year average for a third year in 2018 as higher taxes and new transparency rules on purchases may cap last year's rebound in buying, the World Gold Council said on Tuesday.
In top consumer China, premiums rose to $9-$10 an ounce from $6-$8 last week as demand picked up after prices fell later in the week, traders said.
In Hong Kong, premiums remained unchanged from last week at between 60 cents and $1 an ounce.
Demand in Southeast Asia remained strong ahead of the Chinese New Year that starts from Feb. 16, as dealers stocked up in anticipation of strained supply during the festival week when gold refineries and businesses will be on holidays.
"Supply-wise, we see some issues... That's why the market is getting squeezed a bit and premiums are a little higher now," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
"Dealers generally try to get in more inventory during this period to at least get through the one tight week during the Chinese New Year."
Premiums for the precious metal in Singapore were slightly higher this week at between 80 cents and $1 an ounce, compared with 60-80 cents last week.
"There's no shortage of gold or anything, but it's because of the festival season and the production schedule," said Lan.
In Japan, gold was sold at par after being on discount for the past few weeks, according to a Tokyo-based trader.
(Reporting by Nithin Prasad and Nallur Sethuraman in Bengaluru, Rajendra Jadhav in Mumbai; Editing by Subhranshu Sahu)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)