BENGALURU: Gold in India this week was being sold at a premium for the first time in more than two months as demand gained traction after curbs to combat the second wave of the coronavirus were slightly relaxed.

Retail demand has been recovering slowly as people are making purchases for weddings, said Chanda Venkatesh, managing director of CapsGold, a bullion merchant based in the southern city of Hyderabad.

On Friday, local gold futures were trading around 47,400 rupees per 10 grams after falling to 46,330 rupees on Tuesday, the lowest level since April 9.

Dealers were charging premium of up to $3 an ounce over official domestic prices - inclusive of the 10.75% import and 3% sales levies - this week, compared to last week’s discount of $12.

“There is slight improvement in demand from jewellers as some of them think prices could rise above $1,800 and want to stock up,” said a Mumbai-based bullion dealer with a gold importing bank.

Premiums in top consumer China narrowed to $3-$4 an ounce over global benchmark spot prices, versus $3-$6 last week.

The growth in shipments in April and May from Switzerland was due to the local price trading at a premium rather than an improvement in gold physical demand, Metals Focus said in a weekly note.

China’s net gold imports via Hong Kong more than halved in May from a near three-year high hit in April.

Premiums in Hong Kong were at $1 versus $0.70-$1 an ounce last week. In Singapore, premiums ranged from $1.10 to $1.80 per ounce.

Demand for physical gold in Japan was quiet, with premiums at $0.50 per ounce, traders said.