* Gold buying ebbs when prices return to above $1,600/oz * Hong Kong, Singapore premiums steady By Rujun Shen SINGAPORE, Aug 16 (Reuters) - Gold purchases slowed after prices rebounded to more than $1,600 an ounce on Thursday, as traders await the next drop in prices and demand remains under pressure as economic uncertainties weigh on consumer sentiment. Gold prices have been trapped in a $100 range since mid-May, sapping trading interest as market participants find little inspiration to put down sizable bets, when the macroeconomic backdrop remains uncertain. Global gold demand fell to its lowest in more than two years in the second quarter, as demand from major consumers China and India slumped, said the World Gold Council. But the price drop to below $1,600 this week triggered some buying interest. "We saw slightly better offtake on the physical side when prices dropped below $1,600 in the past two days," said a Singapore-based trader, adding that premiums in Singapore were steady at 50 to 80 cents an ounce above London prices. Though another dealer quoted premiums as high as $1.30. "There is a premium for ready material in an environment when prices move suddenly and rapidly," the dealer said. Indonesia's gold trading business is likely to show little activity in the next week or so because of the Eid al-Fitr holiday for the end of the fasting month. In Hong Kong, trade was dull as concern about slower economic growth in China as well as global economic prospects kept buyers on the sidelines, though there are signs that the upcoming peak consumption season might stir some activity. "Some manufacturers have started to buy gold in preparation for production later in the year," said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong, adding that there is some cautious buying even when prices rose above $1,600. Gold bar premiums in Hong Kong were steady in the range of $1 to $1.50 an ounce, dealers said. WEEK AHEAD Market participants will watch for cues from policy makers on the extent and timing of further monetary stimulus measures, as well as the monsoon rains in India, which is critical to income in rural areas, which contributes 60 percent of India's gold demand. In the quarter that ended in June, gold demand in India slumped 38 percent from a year earlier to 181.3 tonnes, the World Gold Council said.

Source