BENGALURU/ MUMBAI: Physical gold dealers in India were forced to offer the steepest discounts in over a year to lure buyers put off by a record surge in local prices this week, while the banking crisis fueled steady demand in top buyer China.

“Demand has stalled because of the spike in prices. Retail buyers and jewellers were not making purchases this week,” said Harshad Ajmera, a gold wholesaler in Kolkata.

Discounts of up to $57 an ounce were offered in India over official domestic prices — inclusive of 15% import and 3% sales levies — versus $27 discounts last week.

Local gold prices hit a record 60,455 rupees per 10 grams earlier this week. The price rise also put a dampener on sales during the traditionally busy Gudi Padwa and Ugadi festivals in Maharashtra and Karnataka, said a Mumbai-based dealer with a bullion importing bank.

In China, premiums eased slightly to $19-$25 over global benchmark spot prices from $20-$26 last week, but activity was still robust.

Given the uncertainty over the banking crisis, investors were looking for safe-haven assets and capital preservation, keeping demand sturdy said Bernard Sin, regional director, Greater China at MKS PAMP.

Hong Kong dealers sold gold on par with benchmark rates to $2.50 premium.

In Singapore, dealers charged $0.50 to $2.50 premiums. Vincent Tie, sales manager at Singapore dealer Silver Bullion said sales have risen significantly likely due to market nervousness in the past weeks.

“It’s difficult to see how gold and silver will not perform well for the rest of the year given that it is the go-to safe haven asset for the world.” Bullion changed hands at par to a $0.50 premium in Japan.