Gold, two steps ahead: how the rich keep getting richer. New gold rpt Wealthdaily.com/Gold_Report Sales assistants reach for gold rings in a glass case to show to customers ... /MUMBAI (Reuters) - Asian gold buyers have trimmed purchases in the physical market as prices rebounded from a heavy sell-off last week, but inflation concerns will likely continue to buoy appetite for bullion. Buyers in the region rushed to scoop up gold when prices dropped below $1,500 last week, during which bullion prices shed nearly 5 percent -- its biggest weekly fall since March 2009. "Now we are still seeing some buying from local jewellers as well as some Chinese customers," said a Hong Kong-based dealer. The dealer, however, added that many buyers had moved to the sidelines after the price rebound. Investors remained bullish on gold in the long term, as concerns on rising inflation, among other factors, continued to burnish precious metal's safe-haven appeal. Spot gold gained half a percent on Wednesday, poised for a fourth straight session of rise, after data showed higher-than-expected April inflation in China. "Inflation will not cool down very quickly because of wage increase in China. People have money in their pocket, and they don't want to keep it in the bank as interest rates are low," said a second Hong Kong-based dealer. "We saw buying when gold dipped below $1,500 from China, India and Indonesia, but not much scrap selling as people are still bullish on gold." Premium for gold bar in Hong Kong was steady in the range of $1.20 to $1.70 an ounce over London spot prices, he said. INDIAN BUYING SLOWS AFTER FESTIVAL Gold traders in India, the world's biggest buyer of bullion, held back purchases after a key festival last week as prices rebounded, but were on the wait-and-watch mode, looking for a price correction. The most-active gold for June delivery on the Multi Commodity Exchange (MCX) edged up 0.4 percent higher at 22,245 Indian rupees ($497.151) per 10 grams, up from a three-week low of 21,641 rupees hit last Friday. "Buying has dried-up because prices have moved higher again," said Mayank Khemka, managing director with Khemka Group of companies. "There could be buying this month but traders will be waiting for opportunity at 21,000 rupees." India is currently under the high gold demand period, but buying will likely slow to a trickle in the monsoon season, starting in June. Traders said consumers were unwilling to sell the metal on bullish price outlook. "There are no sellers in the market, and last week there were festival buyers," said Jitendra Kantilal, partner with Jugraj Kantilal and Co., a scrap dealer in Mumbai. Scrap sellers asked for prices as high as 24,000 rupees per 10 grams, Kantilal said. ($1 = 44.745 Indian Rupees) (Editing by Himani Sarkar) Follow us on Facebook to get the latest finance and business related updates. Click here for live stock market updates.

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