By Rajendra Jadhav and Swati Verma
MUMBAI/BENGALURU (Reuters) - Physical gold demand picked up pace in major Asian hubs this week, with bullion being sold at a premium for the first time in more than three months in India, while China saw improved appetite for jewellery.
In India, the world's second biggest consumer of the metal after China, dealers were charging a premium of up to $1 an ounce over official domestic prices this week, up from last week's discount of up to $2. The domestic price includes a 10 percent import tax.
"Right now, demand is good. The price correction is giving jewellers an opportunity to replenish inventory at lower levels," said Mukesh Kothari, director at Mumbai bullion dealer RiddiSiddhi Bullions.
Gold futures in India fell to 31,777 rupees per 10 grams on Thursday, the lowest level since January 9.
Jewellers have been making healthy purchases as retail demand for weddings is expected to improve if prices remain at the current level, said a Mumbai-based dealer with a bullion importing bank.
The yellow metal is considered an essential part of weddings in India.
The gold market in China also saw increased demand, pushing premiums higher to $9-$13 over the global benchmark from the previous week's $8-$11.
"Since March 8 is also a festival in China, this week's jewellery demand has also been slightly better compared to normal days," said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
However, consumption had dried up a bit with consumers having already exhausted their spending during the Lunar New Year holiday, Li added.
Singapore witnessed slight demand as well, mostly due to a dip in global prices earlier this week, said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
Benchmark spot gold prices touched an over five-week low of $1,280.70 this week.
Premiums of around 60-80 cents were being charged over the benchmark in Singapore, traders said, little changed from 50-80 cents previously.
"Gold prices in the local currency are also stagnant, which has not excited investors much," said a Singapore-based trader.
Hong Kong markets were, however, relatively quiet, with premiums unchanged at 50 cents to $1.30 an ounce.
In Japan, the metal was sold at par with the global benchmark, compared with a discount of about 50 cents last week, a Tokyo-based trader said.
The fallout from the U.S.-China trade war has led to slower industrial demand for the metal, he added.
(Reporting by Swati Verma and K. Sathya Narayanan in Bengaluru; Editing by Arpan Varghese and Emelia Sithole-Matarise)