Some Indian jewellers stocked up as bullion prices dropped from a two-week high, while selling from other consumers in Asia also slowed, keeping premiums for gold bars steady, dealers said on Thursday. But physical trading was slow ahead of the release of US payrolls data on Friday, which could set the tone for currencies and gold. Analysts expect the data to show 513,000 jobs added to the economy in May, a fifth straight month of gains. Gold edged down to around $1,222 an ounce, lower than this week's peak around $1,230. Gold struck a record of $1,248.95 in mid-May as investors ditched the euro on fears the euro zone credit problems were spreading. "India is buying a bit. Indonesia is still selling but at a slower pace, and I don't see much gold being returned to the market from Thailand," said a dealer in Singapore. "There has been demand at below $1,220." Gold bars were quoted at a premium of 70 to 80 cents to the spot London prices in Singapore, unchanged from last week. Although quite limited, Indian jewellers have been showing buying interest whenever the gold price drops during the wedding season in the world's largest consumer. Gold jewellery forms an essential part of the dowry basket and Indian parents give it to their daughters at weddings for security, but fewer weddings could take place during the June-September monsoon. Demand for gold in India hinges on a good monsoon, which boosts farm output and rural incomes. July is usually a lean month in India because farmers, who account for 65 per cent of the country's gold demand, spend their money on sowing crops. India's jewellery demand rose to 147.5 tonnes from 37.7 tonnes in the first quarter of 2009, which suggested that local consumers started to get used to the high prices. But in Dubai, dealers still noted persistent selling from jewellers, while investors were on the sidelines ahead of the US payrolls data. "Premiums have cooled off a bit and at the current conditions and prices, physical offtake hasn’t been impressive enough," said Pradeep Unni, senior analyst and trader at Richcomm Global Services in Dubai. "Fears that higher than expected non-farm payrolls figures would hit the screen tomorrow has made cautious investors even more nervous." In East Asia, premiums barely changed at 20 to 50 US cents in Hong Kong and were steady in Tokyo at 25 to 50 cents, dealers said. "We are seeing steady demand from investors because of the crisis in the euro zone. At the same time, demand from the industrial sector is also continous," said a dealer in Tokyo.

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