BENGALURU/MUMBAI: Physical gold in top consumer China was sold at a small premium for the first time since early 2020, as demand picked up ahead of the Chinese new year.

Dealers in China offered premiums of $0.50-$4 an ounce over benchmark spot gold prices, compared with last week's $7-$10 discounts. "There's been an uptick, mostly due to higher demand ahead of Chinese new year and some economic recovery," said Ronald Leung, chief dealer for Lee Cheong Gold Dealers in Hong Kong, adding demand could rise further on COVID-19 vaccine rollouts.

Chinese dealers were forced to offer steep discounts for most of last year, as the pandemic hammered the economy and retail demand.

A stronger yuan and lower spot gold prices also helped, said Peter Fung, head of dealing at Wing Fung Precious Metals.

Global benchmark spot gold prices slumped 2.6% last week.

In India, dealers charged premiums of up to $0.50 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, down from last week's premium of $1.50.

"Demand is a little subdued due to price fluctuations. Consumers are on the sidelines and waiting for a clear trend," said Ashish Pethe, partner at Waman Hari Pethe Jewellers.

On Friday, local gold futures traded around 49,200 rupees per 10 grams, having hit a one-month low of 48,635 rupees earlier this week.

Jewellers could ramp up purchases for the wedding season from next week, said a Mumbai-based bullion dealer with a gold importing bank.

Buying also picked up in Singapore due to lower spot prices, with premiums of $0.80-$1.80 charged versus $0.80-$1.30 an ounce last week.

The pick-up in demand was "encouraging", said Vincent Tie, sales manager at Silver Bullion.

Hong Kong gold was sold between a discount of $2 to a premium of about $1.50, while in Japan, gold was sold at anywhere between on par with the benchmark to a $1 premium.