BENGALURU: Physical gold demand in India and other major hubs weakened this week as consumers were put off by a rise in the yellow metal’s price, while premiums for bullion also retreated.

Gold futures in India were trading around 47,800 rupees per 10 grams on Friday, having risen to an over three-week high of 48,290 rupees in the previous day.

“Demand was improving after the government eased lockdown restrictions, but the sudden price jump is again weighing on sentiments,” said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.

Dealers were charging a premium of up to $1.5 an ounce this week over official domestic prices - inclusive of the 10.75% import and 3% sales levies, down from last week’s premium of $3.

Jewellers are making inquiries and buying small quantities but still their purchases are far lower than normal, said a Mumbai-based bullion dealer with a gold-importing bank.

In top consumer China, premiums were at about $1 an ounce over the global benchmark spot prices compared with last week’s $3-$4 premium.

Demand was also soured after the Postal Savings Bank of China announced the suspension of new openings for accounts to trade the spot precious metals market, said Bernard Sin, regional director at Greater China at MKS.

“I expect more Chinese banks to completely halt precious metals trading based on restrictions imposed by the government,” Sin said.

In Singapore, premiums ranged from $1.20 to $1.65 per ounce versus $1.10 to $1.80 last week.

“Gold prices came up a little, so we’ve actually in fact seen more selling. We’ve seen a lot more retail client coming through to sell and probably they were all waiting on the sidelines for it go above $1,800,” said Brian Lan, managing director at dealer GoldSilver Central.