Some gold shipments to China have been postponed by a few weeks as an upcoming holiday and volatile prices curb demand for the metal, traders in Hong Kong said.
Premiums on the Shanghai Gold Exchange to London spot prices fell to multi-month lows of $7 an ounce this week from about $30 in April-May, they said, indicating weak demand.
"People are postponing shipments to the later part of October. Right now demand is very quiet over there," said a dealer with a bank in Hong Kong.
"(
he delay) is just a recognition that the holidays are coming in."
Chinese markets will be closed October 1-7 for the National Day holiday.
A pick up in weddings usually begins in the holiday, spurring demand for gold jewellery. But buying has been subdued this year as consumers expect prices to drop further and as many already made purchases during a sharp slide in April.
Gold prices have fallen over 20 percent this year on expectations the U.S. Federal Reserve would begin tapering its bond-buying stimulus and on huge outflows from gold-backed exchange traded funds.
The Fed surprised markets earlier this month when it decided to stick with its massive stimulus, but some officials have since said the central bank could still begin tapering later this year, causing price swings.
"Physical demand is becoming quite sensitive to price levels," Standard Bank analyst Walter de Wet said in a note on Thursday. "We currently read gold physical demand as providing good support around the $1,300 level, but this support is likely to decline the further we move away from $1,300."
Spot gold was trading near $1,320 on Friday.
INDIAN PREMIUMS EASE, OTHERS STEADY
Premiums in Japan, Singapore and Hong Kong remained steady from last week's levels.
In India, premiums eased to $5-$7 an ounce from $40 earlier in the month as traders expected fresh supplies to come into the market.
India's gold imports had virtually come to a halt after its central bank issued a rule tying imports to exports. A lack of clarity on the move had prevented customs from clearing shipments at airports and banks from placing new orders.
But the government and banks have agreed how the new rules should work, with customs starting to clearing some shipments on Wednesday.
"We are expecting all consignments at airports to get cleared by early next week," said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation.
The restart of gold imports would come just ahead of the peak Christmas season for jewellery exporters, and the wedding and festival season for local dealers, when demand for the metal goes up.
"We will be aggressive as we were before in imports," said a dealer with a gold-importing private bank in Mumbai.
