By Jesse Riseborough, Bloomberg
Melbourne: Gold traded near a three-week low in Asia amid speculation physical demand from India will slow in the months ahead. Silver was little changed.
Imports of bullion by India, which uses more gold than the US and China combined, traditionally peak in May as the local wedding season drives demand, according to a report by Robin Bhar, a London-based analyst at UBS Ltd. Gold has fallen by 1.2% this week to trade near a three-week low.
Historically “imports have peaked in May and then fallen sharply in June before recovering somewhat later in the year,” Bhar said in the report. “The wedding season is a large driver of this seasonal demand, as is the rule of thumb that the Indian market does not buy much gold when it is raining.”
Gold for immediate delivery fell as much as 70 cents, or 0.1 %, to $672.45 an ounce and traded at $672.85. Silver for immediate delivery was unchanged at $13.2 an ounce.
World jewelry demand fell by 16% last year due to a higher gold price, with demand from India falling to 90 tons according to a report from London-based GFMS Ltd. last month. India, Turkey and Italy accounted for half of the decline in jewelry demand last year, the report said.
Trading will be subdued because of public holidays in Japan and China today and tomorrow.
In Japan, gold for delivery in April 2008 yesterday fell 14 yen, or by 0.5 %, to 2,622 yen a gram ($660 an ounce) on the Tokyo Commodity Exchange.