* Chinese markets closed, activity dim in Hong Kong
* Lunar New Year demand at record low- analyst
* Indian market awaits federal budget on Feb. 1
By Arpan Varghese
BENGALURU/MUMBAI, Jan 31 (Reuters) - Physical gold markets
in major Asian hubs saw activity dwindle this week as the
coronavirus epidemic took a toll on demand, especially with top
consumer China remaining out of action.
Several countries tightened travel curbs because of the
coronavirus in China, a day after the World Health Organization
declared a global health emergency.
"The (gold) market is quiet. Nobody wants to go out and
spend money. People are spending money on masks and alcohol.
China is still closed," said Ronald Leung, chief dealer, Lee
Cheong Gold Dealers in Hong Kong.
Several Chinese municipalities and provinces have asked
companies to extend the Lunar New Year holiday by a week, to
"Demand in China has hit record low levels during the
Chinese New Year in 2020 due to the coronavirus," said Samson
Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
Hong Kong also saw little activity, with gold being sold at
anywhere from on par with the benchmark to a premium of about
Global benchmark spot gold prices remained elevated,
at around $1,562.70-$1,586.43 an ounce.
"The next two to three weeks will be crucial. The number of
cases and how intense the outbreak gets will affect the market,"
said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd.
In Singapore, premiums were little changed from last week
at $0.40-$0.50 an ounce.
"We've yet to see a decline in demand from local demand due
to the outbreak, probably due to the lack of evidence of any
community spread in Singapore," Silver Bullion sales manager
Vincent Tie said.
India too saw tepid demand, thanks to high domestic prices
and in anticipation of the federal budget to be presented on
Feb. 1. India had raised import tax on gold in the last budget.
"Demand is dull. Buyers wanted to know provisions for the
bullion industry in the budget before making purchases," said
Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji
Dealers offered discounts of up to $13 an ounce over
official domestic prices, up from $11 last week. The domestic
price includes a 12.5% import tax and 3% sales tax.
Gold futures held near a record high of 41,293
rupees hit earlier this month.
"At this level, jewelers don't want to build stocks," said
a Mumbai-based dealer with a bullion importing bank.
Indian demand could rebound in 2020, the World Gold Council
In Japan, gold was sold at a $0.50 an ounce premium to a
(Reporting by K. Sathya Narayanan and Sumita Layek in
Bengaluru, Rajendra Jadhav in Mumbai; Editing by Louise Heavens)