Gold kilobars were offered in Hong Kong at a discount to London prices of 30 to 60 US cents instead of the usual premium, traders said. They attributed the discount to slow demand and strong supply of gold.

Demand was weak because ``the price is about $7 higher than it was a few days ago,'' a trader said.

Gold began the week below US$290, then shot up to nearly US$300 on rumours, later denied, that the Bank of England was trimming gold sales. By the end of the week, gold had retraced most of the rally's gains.

In addition, supply in Hong Kong was strong because of gold which entered from mainland China in recent weeks when prices were higher, a trader said.

That flow stopped after Chinese authorities adjusted the gold price in China to more closely match the world price.

Before demand improved, the public would have to adjust to new levels for gold, which took off after the market suddenly turned bullish in September from 20-year lows of about US$252 an ounce.

``People have to get used to the gold price in the mid US$290s again. It's a matter of time,'' he said.

Spot gold was quoted at US$293.25/294.00 an ounce at 0430 GMT.

Hong Kong demand was also slow because of weakness in the rest of Asia, another trader said.

The Hong Kong market was likely to remain quiet for the rest of 1999, while next year's outlook for gold demand could be influenced by developments in equities markets, a trader said.

``If the equities markets in Hong Kong or the United States experience a correction, that may help the metals'' by causing investors to buy gold instead, he said.

At the current price, physical demand was at a standstill, a Singapore trader said.

``The price is too high to buy kilobars, but it's not high enough for people to sell. We are more or less trapped,'' he said.

If gold were to climb above US$300 an ounce again, then scrap would come into the market, the trader said.

But as the price moves nearer to US$280, physical demand will return strongly, he said.

The premium in Singapore was about 50 US cents.