* India drops to $ 2.5 / oz premium from last week’s $ 2 reduction
* Discounts in China unchanged from $ 15 to $ 20 / oz
* Dealers concerned about the new variant of the coronavirus
* Spot gold prices set for a 1% gain this week
BENGALURU / MUMBAI, Dec.31 (Reuters) – Physical demand for gold remained largely subdued in major Asian hubs this week as the holidays kept buyers at bay, although prices in India have tilted at a premium due limitation of shipments.
“Retail demand is negligible as people are in the mood for the holidays,” said a Mumbai-based dealer with a bullion importing bank.
Indian dealers were charging a premium of up to $ 2.5 an ounce this week on official domestic prices, including 12.5% import taxes and 3% sales taxes, up from at the $ 2 reduction last week.
Gold imports have all but ceased in recent days, with most foreign banks closed for the holidays, allowing local dealers to charge a premium despite weak demand, a Chennai-based bullion trader said.
Local gold futures were trading around 50,200 rupees for 10 grams on Thursday.
Spot gold prices were on track for a 1% gain this week.
In China, discounts were unchanged from the previous week at $ 15- $ 20 an ounce, with demand remaining subdued during the end-of-year holidays, while in Hong Kong, premiums remained stable at $ 0.50 – $ 1.50 as the pandemic continued to stifle activity.
Despite mediocre purchases of physical gold, which forced dealers in the world’s largest bullion consumer to offer deep discounts on gold for most of 2020, dealers expect demand to pick up. next year as a consumer who has held back purchases to come back to the market.
In Singapore, higher demand widened premiums slightly to $ 0.90 – $ 1.30 an ounce from $ 0.90 – $ 1.20 last week.
“We’ve seen more businesses come in to buy (for end of year gifts) and also buy retail; they are using this opportunity of declining gold prices from the last few months to buy, ”said Brian Lan, general manager of GoldSilver Central dealership.
But dealers were concerned about the spread of a more infectious variant of the coronavirus that is up to 70% more transmissible than the original.
“Not all is rosy at this point, I hope the vaccine will control this new strain,” Lan said. (Reporting by Sumita Layek in Bengaluru and Rajendra Jadhav in Mumbai; editing by Arun Koyyur)
