Asia gold demand steady as buyers await bigger dips, riskier investments beckon

By Vijaykumar Vedala and Rajendra Jadhav

MUMBAI/BENGALURU (Reuters) - Physical gold demand was steady this week in most Asian centers as buyers hoped for further price dips amid growing appetite for riskier investments, while a slide in local rates failed to restore bullion's allure in India.

Benchmark spot gold edged higher to around $1,277 an ounce on Friday, but was still trading near a 3-1/2-week low touched on Thursday amid a surge in U.S. equities.

"Demand picked up over the last couple of days in Singapore and most of southeast Asia as prices came off a bit. But for the week, there wasn't much change. Unless it goes close to $1,260 there won't be many new buyers coming in," said a Singapore-based dealer.

A lack of clear drivers kept prices between $1,265 and $1,300 an ounce throughout November, its narrowest monthly range in 12 years.

In China, gold was sold at a premium of $5-$8 an ounce over benchmark rates, mostly unchanged from last week.

"Customers are waiting for prices to fall further; veering more towards stock markets. Some gold customers have also put their money in bitcoins," said Dick Poon, general manager at Heraeus Precious Metals in Hong Kong.

Premiums in Hong Kong rose to $1-$1.80 an ounce from last week's $1 level, and were nearly unchanged at 50-90 cents in Singapore, traders said.

"We continue to see a growing trend of selling gold in order to use the proceeds for investment in cryptocurrencies, mostly Bitcoin, Ethereum and Monero," said Joshua Rotbart, managing partner of J. Rotbart & Co in Hong Kong.

Bitcoin hit an all-time high of $11,395 on Wednesday before sliding as low as $9,000 in volatile trade on Thursday.

In India, the world's second biggest gold consumer after China, a correction in local prices to the lowest level in over three months failed to spur fresh demand as jewellers postponed purchases, expecting a bigger dip.

"Right now there is no festival to generate retail demand," said Daman Prakash Rathod, director at Chennai-based wholesaler MNC Bullion, adding "Since retail demand was weak, jewellers were also not making big purchases."

Dealers in India offered a discount of up to $1 an ounce this week, down from the $2 discount last week.

The discount narrowed due to the price correction, said a Mumbai-based dealer with a private bank.

Local gold prices fell to 28,950 rupees per 10 grams on Thursday, the lowest since Aug 25.

"Almost all banks have cut down imports in last few days due to poor sales. They are trying to clear stocks imported at a higher price," the dealer said.

Industry officials estimate India's gold imports in the last quarter of 2017 could drop by a fourth from a year ago.

Meanwhile, in Japan, gold continued to be sold at par with the global spot price.

(Additional reporting by Arpan Varghese in Bengaluru; Editing by Adrian Croft)