Lunar New Year boosts China gold demand

MUMBAI/BENGALURU, Jan 27 (Reuters): Demand for physical gold in India improved slightly this week as local prices eased from their highest level in over five years, while buying gathered steam in China ahead of the Lunar New Year festival.

Dealers in India were offering a discount of up to $5 an ounce over official domestic prices, down from last week's discount of $7. The domestic price includes a 10 per cent import tax.

Demand has been slowly improving from retail buyers but still, higher prices are deterring many consumers, said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.

Gold dealers are now awaiting a budget presentation by Prime Minister Narendra Modi's government on Feb. 1.