Premiums for gold bars were unchanged in key bullion trading cities in Asia after a dip in prices failed to ignite much buying interest from jewellers and investors, dealers said on Wednesday. Gold fell to its lowest level in 15 weeks at $413 an ounce on Tuesday after the dollar surged against the euro and took the shine off the yellow metal.
Gold rebounded to around $417.20 an ounce on Wednesday, mainly due to a technical correction, but dealers said a strong dollar and limited activity in the physical sector would limit gains.
"Everybody is waiting for lower prices to buy," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, a key bullion trading city in East Asia. Premiums for gold bars were quoted at 30-40 US cents an ounce to London spot prices in the territory, unchanged from last week. "There's not much business at all. The market is dead," said another Hong Kong dealer.
Lower spot prices normally induce some physical buying interest that lifts premiums. Gold is traded mainly in bars. A standard gold bar in the spot market is 400 ounces or 12.5 kg.
Dealers said falling demand from India and other parts of Asia was putting pressure on the gold price, which has lost more than 6 percent since touching a 2005 high of $446.70 in March.
Gold buying has slowed down in India, the world's largest consumer, with the wedding season drawing to a close.
"I'm looking for gold to push lower given weaker physical demand. There has been a long liquidation in New York," said one regional dealer, who expected gold to move towards this year's low of around $410 an ounce.
The Commodity Futures Trading Commission (CFTC), a US regulator, said on Friday the net speculative long position in COMEX gold fell to 39,509 contracts as of May 24, from 55,944 contracts on May 17.
The nonreportable net long position decreased to 20,954 lots from 23,917 contracts in the previous weekly report.
Dealers reported a slow day in Singapore, which is Southeast Asia's biggest bullion trading centre. The Songkran water festival is over in Thailand and there is no festive demand from neighbouring Indonesia and Malaysia, they said.
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