Asia Gold-Currencies, euro crisis hit demand; premiums steady

* Rain gods rather than government eyed in India

* Premiums steady in Hong Kong, Tokyo, Singapore

* Asian demand subdued

By Siddesh Mayenkar

MUMBAI, June 27 (Reuters) - Weaker local currencies are

weighing on gold demand from India, the world's largest consumer

of the precious metal, and Indonesia, another leading Asian

buyer, as traders also favour cash on concerns over a

deterioration in the euro zone crisis.

Premiums stayed steady in Hong Kong, Tokyo and Singapore.

Traders in India, Asia's third-largest economy, are also

waiting for the monsoon to pick up, which could boost the income

of farmers, who buy more than half of India's gold.

"If the monsoon turns weak, jewellery demand will go further

down ... we are now dependent on gods rather than government,"

said Haresh Acharya, head of bullion desk of Parker Bullion in

western Indian city of Ahmedabad.

The fall in the rupee, which hit a record low last week, has

sent Indian gold prices soaring despite the weak global

trend, limiting imports. The rupee is important in determining

the landed cost of the dollar-quoted yellow metal.

The Indian government doubled import duty on gold to 4

percent in March in a bid to curb its bloated current account

deficit.

"Business is zero... the situation is very bad as there are

no hopes of appreciation in the rupee," said Acharya.

Gold was flat at $1,571.50 by 0548 GMT, after falling

on Tuesday on worries that a global economic slowdown triggered

by a worsening debt crisis in Europe could prompt investors to

turn to the relative safety of the U.S. dollar.

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"We have seen very slow demand. They are worried about the

debt crisis in Europe, everybody is trying to keep more cash on

hand," said Dick Poon, manager, Heraeus Metals in Hong Kong,

adding the depreciating currency is also an issue for traders.

Traders are eyeing yet another European summit slated for

Thursday-Friday, the 20th such meeting called to try to resolve

the spreading crisis, which has sent gold prices to a record

high of about $1,920 an ounce as buyers seek safe havens.

Premiums on gold bars in Hong Kong stood around 70 cents to

a dollar an ounce above London prices, steady from a week

earlier. Premiums in Tokyo were also steady at 50 cents, while

in Singapore, premiums were flat at 70-80 cents.

There was a lack of enthusiasm among traders in Indonesia

before the traditional buying period of Ramadan holidays due to

depreciation in the local currency, dealers said.

"Despite Ramadan, buying from Indonesia is not high compared

to previous years as their local currency is weak," said a

Singapore-based dealer, referring the Muslim fasting month that

starts in July, when gift giving is at its peak.

China's jewellery market also entered the summer lull, with

no major festival in sight until early October.

WEEK AHEAD

Latest rainfall figures out from India suggest a below

average rainfall so far from June and another weekly update is

expected on Thursday. The Indian weather office is still

predicting an average monsoon.

Buying from rural areas accounts for about 60 percent of

gold imports, and farmers depend on monsoon rains for better

yields, production and profits.

Farmers often invest in gold due to a lack of banking

facilities in rural areas.

(Editing by Jo Winterbottom and Ed Davies)

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