MANILA/MUMBAI: A fall in global gold prices to eight-month lows this week failed to boost demand in top consumers China and India as would-be buyers anticipate further declines on the back of a strengthing US dollar.

Bullion took a hit after Federal Reserve Chair Janet Yellen told Congress the US central bank is on track to lift interest rates this year if the US economy expands as expected, sending the dollar to a seven-week high versus a basket of currencies.

Spot gold fell as far as $1,142.10 an ounce on Thursday, its lowest since November 2014. It is on course to extend its losing streak to a fourth week.

"Demand is sluggish. The Chinese would rather invest in the stock market, the property market, than in gold. The strong dollar is dampening interest in gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers Ltd in Hong Kong.

Domestic prices in India remained at a discount to the global spot benchmark, although the discount narrowed to $4-$5 an ounce from $6-$8 last week.

"Demand is quite weak across the country as consumers are cautiously spending," said Neelkamal Soni of Bikaneri Jewels. "Jewellers are giving preference to liquidate old stocks instead of buying new gold to prepare jewellery."

Indian gold prices are trading at their lowest level in four months.

Reflecting weak demand, India's gold imports dropped 37 percent in June from a year ago to $1.96 billion. Imports should fall further in July with demand not picking up despite lower prices, said Bachhraj Bamalwa, director at All India Gems and Jewellery Trade Federation.

The Indian market has not been at a premium since April.

"This may mean the market will have to wait until closer to harvest time to see stronger Indian demand," said HSBC analyst James Steel.

India's rural sector accounts for two-thirds of domestic gold demand.

In Hong Kong, gold was being sold at a premium of 80 cents to $1 an ounce over global spot, against 50 cents to $1 last week. Premiums on the Shanghai Gold Exchange were steady at $3-$4 an ounce.