Physical gold buyers in some Asian hubs were drawn to a dip in prices this week, but the mood was cautious as some bet on bigger declines while economic headwinds also loomed.
Domestic prices in most regions took cues from a slide in international spot gold prices this week amid a surging dollar.
Indian prices fell to 49,971 rupees per 10 grams on Friday, compared with 52,300 rupees last week.
"After the import duty hike, prices rose but they immediately fell tracking global prices. The correction is bringing back consumers," said Chanda Venkatesh, managing director of CapsGold, a Hyderabad-based bullion merchant.
Dealers offered discounts of about $20 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — versus $28 discounts last week.
Overseas prices are attractive but the depreciation in the rupee to a record low is limiting jewellers' purchases, said a Mumbai-based dealer with a private bullion importing bank.
But central bank buying could offset some of the weakness in physical gold demand in India and China, helped by currency devaluation against the dollar, ANZ analysts said in a note.
Chinese dealers sold gold at $3-$5 premiums over global prices.
"Consumers are very cautious and while there may be some investment among the older generation, youngsters are unlikely to be buying jewellery in the foreseeable future," said StoneX analyst Rhona O'Connell.
China's economic growth slowed sharply in the second quarter amid COVID-19 lockdowns, pointing to pressure over the coming months.
In Hong Kong, gold was sold anywhere between on par with the benchmark to $2 premiums, while Singapore saw $1.50-$1.80 an ounce premiums.
Amid price dips, "we've seen more clients coming to buy and also wholesalers covering their shorts," said Brian Lan, managing director at dealer GoldSilver Central, adding "many are still looking to see whether prices will go even lower."
(Reporting by Eileen Soreng, Bharat Govind Gautam and Arundhati Sarkar in Bengaluru, Rajendra Jhadav in Mumbai; Editing by Aditya Soni)