SINGAPORE - Asia's bullion market stirred on Wednesday after gold slumped over 3 per cent over two days to a four-month low as buyers cautiously took advantage of the price drop.

Spot gold dipped to a four-month low near US$1,580 (S$1.98) an ounce, extending a 2-per cent decline from the previous session, as the political crisis in Greece drove down the euro, dragging along gold among other assets.

"We've seen some scaled-down buying, but not much," said a Hong Kong-based dealer, "I think some people are holding off because prices are still heading south."

Premiums on gold bars in Hong Kong were steady around US$1.10 to US$1.70 an ounce over London.

In Singapore premiums were little changed from a week earlier at around US$1 an ounce, despite a pickup in buying interest from Southeast Asian countries.

"Thailand has been buying today," said a Singapore-based dealer, "But premiums are unchanged because there isn't a shortage in kilobar. We won't see a rise in premiums unless there is a sudden surge in demand."

In India, the benchmark gold June gold futures contract on the Multi Commodity Exchange dropped to 28,453 rupees per 10 gram.

But buying was slow to pick up despite the sharp decline in prices, dealers said.

"India is slow in buying, so are Dubai and the rest of the Middle East," said Pradeep Unni, head of research at Richcomm Global Services in Dubai.

The wedding season in India will taper off in mid-May, ushering in the lull gold consumption season which will last until after the monsoon season from June through September.

"India is still struggling to recover from low growth, high inflation and low capital inflows, and the weak rupee has eroded the advantage of price drops in the international markets."

Week ahead

The World Gold Council is scheduled to release its quarterly research report on global gold demand next week, which will be under scrutiny of market participants.

India will see its wedding season end in mid-May, weakening bullion demand from the world's top gold consumer.