By Manolo Serapio Jr and Rajendra Jadhav
MANILA/MUMBAI (Reuters) - Physical gold demand was slow in top consumer China, as the metal clung to this year's strong gains, while a strike by jewellers protesting against the imposition of a tax curbed demand in No. 2 market India.
Asian buyers have mostly skipped gold this year, anticipating a big retreat in prices that has yet to unfold.
Potential delays in U.S. interest rate hikes and a wobbly global economy have combined to lift gold to a 13-month high of $1,279.60 an ounce by March 4, following bullion's best rally in four years in February.
The metal was trading at around $1,250 on Thursday.
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"I can't see any physical demand here," said William Wong, assistant head of dealing at Wing Fung Precious Metals in Hong Kong, who monitors gold demand in China.
Gold on the Shanghai Gold Exchange, the world's largest physical gold exchange, was either at parity to global prices or at a discount of up to $3 an ounce this week, said Wong.
There is no big reason for Chinese consumers to snap up gold at this time, with no long holiday or festival ahead, he said. "And the price is too high," Wong added.
In Hong Kong, gold is being sold at a premium of 70 cents to $1 an ounce, unchanged from the prior week, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers Ltd.
"People are still trying to digest whether it's really a boom market for gold," said Leung.
Gold demand in India was sluggish as jewellers were on strike to protest against a government decision to impose an excise duty of 1 percent on jewellery sales.
Dealers were offering a discount of up to $45 an ounce to the global spot benchmark, the same as last week. The discount hit a record $53 in late February.
Indian jewellers have been on an indefinite strike since the beginning of March to protest against the reintroduction of an excise duty on gold jewellery after four years.
The strike will continue until the government rolls back the tax, said G.V. Sreedhar, chairman of industry body the All India Gems and Jewellery Trade Federation.
The government was forced to roll back an excise duty it imposed in 2012 after a strike by jewellers that lasted 21 days. "Due to the strike, business has come to a standstill. Jewellers are not making purchases as they have closed their shops," said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in India's southern city of Chennai. "Gold imports will be negligible in March. Only refiners are importing dore to run refineries," Rathod said. Dore is an alloy of gold and silver that is refined to get pure gold.
Indian jewellery sales have fallen since the start of the year, hit by higher gold prices and delayed purchase decisions by consumers, who had hoped the national budget would cut an import duty of 10 percent.
But Finance Minister Arun Jaitley surprised the market by maintaining the level and imposing an excise duty on jewellery sales from March 1.
(Reporting by Manolo Serapio Jr. in Manila and Rajendra Jadhav in Mumbai)
