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ASIA GOLD-Demand is sluggish as volatility in prices affect sentiment

The demand for physical gold was sluggish across the major Asian markets this week as volatility in prices weighed on sentiment. Premiums in China remained firm, while discounts in India were narrowing.

Dealers in the top consumer China have charged premiums between $10 and $25 per ounce above the global benchmark spot rate, compared to premiums between $4.2-$33 from last week.

On Wednesday, spot gold dropped to its lowest levels in more than a week, dropping below the $3300 mark. It then recovered to trade at $3335 by 0520 GMT Friday.

In recent days, U.S. president Donald Trump has expanded his trade war, announcing levies against several countries that will take effect August 1.

Hugo Pascal said that this uncertainty failed to spark a renewed interest for gold purchases in China during the week.

China's central banks issued new anti-money-laundering and counter-terrorism funding regulations that target precious metals and gem dealers, according to the state news agency Xinhua.

A precious metals trader based in mainland China said that "this regulation" will kill some potential onshore demand. He added that gold demand could only increase when prices reach $3,000 to $3,100.

Meanwhile, Indian dealers' discounts The price of gold has dropped to as low as $8 per ounce, including 6% import duties and 3% sales taxes, down from $14 last week.

A Mumbai-based bullion seller with a private banking firm said that discounts are slowly narrowing because of limited supplies. Imports were low between May and June, and scrap is also scarce.

The price of domestic gold per 10 grams was around 97.300 rupees (1,133.57 dollars) on Friday, after reaching an all-time high of 101.078 rupees in the previous month.

During the monsoon period, which spans from June to September, gold demand in India is usually subdued.

In Hong Kong, gold In Singapore, the price was $1.50 higher than in Singapore. Gold traded at par prices with a $2.20 price premium.

In Japan, bullion The premium was $0.50. (85.8350 Indian Rupees = $1)

(source: Reuters)