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Physical gold buying in India improved this week on a retreat in domestic prices, while premiums in top consumer China pulled back from record highs, attributed to an easing of bullion import restrictions.

Dealers in India charged premiums of up to $2 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — compared with discounts up to $8 last week, the highest since May.

“There is improvement in retail demand ahead of festivals,” said a Mumbai-based bullion dealer with a private bank. Local gold prices were trading around 58,900 rupees ($710.30) per 10 grams on Friday.

Chinese dealers charged premiums between a wide $60 and $130 an ounce range over global spot prices, versus $90-$135 last week.

The recent high premiums have been attributed to Beijing’s efforts to shore up the domestic currency, including via curbs on imports of dollar-denominated gold, amid strong domestic demand.

“The People’s Bank of China indirectly conveyed its concerns about these price swings by granting import approval to only a limited number of banks when premiums exceeded $100,” said Bernard Sin, regional director, Greater China at MKS PAMP.

China’s yuan bounced against a buoyant dollar, underpinned by state bank support.

“Easing import restrictions open the market to pent-up demand amid the improved outlook for China’s economy,” ANZ Bank analysts wrote in a note.

In Hong Kong, bullion was sold at premiums of $2-$4 and in Singapore, at $1.5-$3.

International prices have ranged between $1,880 and $1,990 since mid-May, which Vincent Tie, sales manager at Singapore dealer Silver Bullion, said was “a neutral signal to retail buyers as they’re likely to have bought gold at similar prices earlier, and there’s no strong push factor to enter the market again.”

In Japan, dealers sold gold at par to $0.5 premiums.

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