Regions

Gold buying in the world's top two gold consuming countries remained slow this week as premiums in China improved only slightly and those in India slipped as the global benchmark stabilised at $1,200 an ounce.

Spot gold XAU= is trading not far below a seven-week top of $1,224.10 reached on April 6, as recent weak U.S. economic data kept alive hopes the Federal Reserve could delay a rate hike that some Fed officials think could still come as early as June.

Premiums for physical gold on the Shanghai Gold Exchange edged up to $2-$3 an ounce over the spot benchmark from just above a dollar last week.

"Even if the price drops to $1,190 we don't see big demand coming back in the market as long as the U.S. dollar remains strong," said Dick Poon, general manager at Heraeus Precious Metals in Hong Kong.

The dollar has basked in the increasing likelihood of a U.S. rate increase, which dims the appeal of assets such as gold that do not pay interest.

Poon said that instead of gold, more investors were putting their money into Chinese equities that had seen a massive rally this year, fuelled by a rush of retail investors.

China stocks posted their biggest gain in nearly three months on Thursday, hitting fresh seven-year highs, despite a gloomy outlook for the economy which grew at its slowest pace in six years in the first quarter. [.SS]

In Hong Kong, gold premiums eased to between 50 cents to a dollar an ounce from $1-$1.30 last week, traders said.

Trading activity was steady in India ahead of next Tuesday's Akshay Tritiya, a key gold buying festival.

India's gold imports surged well ahead of the event as jewellers stocked up. Imports more than doubled to 125 tonnes in March from 60 tonnes in the same period a year ago.

"Demand is not very great as everyone is holding back buying ahead of Akshay Tritiya," said Rahul Gupta, director, at P.P. Jewellers in New Delhi.

Gold is trading in India at a premium of $2 an ounce over the international market, said Gupta, down from $3 last week.