A sharp retreat in domestic prices boosted retail demand for physical gold in India this week, prompting dealers to charge premiums for the first time in more than three months.

Top consumer China also saw robust appetite for bullion, with some jewelers restocking following the New Year holidays.

Retail buyers in India were waiting for a correction for more than a month, and now they are making purchases for weddings, said a Mumbai-based bullion dealer with a private bank.

Local gold prices fell to 55,817 rupees per 10 grams on Friday from an all-time high of 58,847 rupees hit earlier this month.

Dealers charged premiums of up to $2 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — up from last week’s $18 discounts.

“Supplies are limited. Anticipating duty cut in the budget, industry curtailed imports last month. Now suddenly, there is a pick up in demand,” said a New-Delhi-based bullion dealer.

India’s January gold imports plunged 76% from a year earlier to a 32-month low on subdued demand after domestic prices rallied to record highs.

Asia gold: Price dip sparks buying in key hubs, China premiums firm

In China, dealers raised premiums to anywhere between $16 to $27 an ounce over global benchmark spot prices from $12-$15 last week.

“Demand has been largely driven by jewelry retailers in the lead up to Chinese New Year,” said Bernard Sin, regional director, Greater China at MKS PAMP.

“Jewelers have been restocking again after the long Chinese New Year holidays. This has led to a steady demand for gold as the spot market drifted lower.”

In Singapore and Hong Kong, bullion changed hands anywhere between $1 and $2.

Meanwhile in Japan, local investors stayed on the sidelines and traders expressed concerns over the near-term demand outlook for the metal.

Dealers in Japan sold bullion between at par to $0.50 premium over the benchmark.