Physical gold demand moderated this week in top hubs as a rebound in domestic prices and a seasonal lull slowed market activity.

In top consumer China, premiums eased to $3-$6 an ounce over global benchmark spot prices from $5-$10 last week, which were the highest since early June.

While there's still a slight premium for gold in China, "physical markets in Asia have been very quiet this week," said Joseph Stefans, Head of Trading at MKS.

"Hong Kong and Singapore too remain extremely quiet during these summer months with not much exchanging hands," Stefans added.

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Premiums slipped to $0.50-$1 in Hong Kong from $0.80-$1.80 last week, while $1.60 premiums were quoted in Singapore.

"On the retail buying side, we're beginning to see investors buy into the weakness in gold prices," said Vincent Tie, sales manager at Singapore dealer Silver Bullion.

Demand in India steadied after prices recovered to around 47,350 rupees per 10 grams on Friday, from a four-month low of 45,662 rupees last week.

"Jewellers are not active in the market. Last week they bought aggressively when prices were low," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.

Indian premiums fell to $3 an ounce over official domestic prices - inclusive of 10.75% import and 3% sales levies - versus last week's $5 premiums.

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Jewellers across the country have planned to go on a strike on Aug. 23 to oppose a government move to make hallmarking of gold jewellery and artefacts mandatory from mid-June, said Dinesh Jain, director of All India Gem and Jewellery Domestic Council (GJC).

This has disrupted trade because of the limited capacity of hallmarking centers, and it takes up to 10 days to hallmark the jewellery, Jain said.

In Japan, gold was sold at $0.40-$0.50 premiums, Tokyo-based traders said, adding activity had slowed during the summer holiday season.