BENGALURU /MUMBAI: The physical gold market in India flipped to a premium this week as a pullback in domestic prices boosted demand, while buying was lacklustre in other top Asian hubs.

Dealers in India this week were charging a premium of up to $1.5 an ounce over official domestic prices - inclusive of the 15% import and 3% sales levies - up from the last week’s discount of $2. Indian local gold prices fell to 58,096 rupees per 10 grams on Friday, their lowest since March 16, before recovering to about 58,300 rupees.

“After a long time, jewellery showrooms are witnessing improvement in footfall. Retail buyers are making purchases,” said a dealer with a Mumbai-based bullion importing bank.

Jewellers were on the sidelines for the past few weeks, but this week, some jewellers started making purchases, said a New Delhi-based bullion dealer. In top consumer China, gold was sold at anywhere between $1 discounts and $5 premiums to global spot prices , versus $1 discounts-$6.50 premiums last week as the Dragon Boat Festival holiday break kept buyers away.

“With China’s upcoming holidays, activity might slow down but if prices keep falling, I expect the buyers will jump back in,” said Joseph Stefans, Group Head of Trading at MKS PAMP. “The hot Chinese gold demand we saw earlier this year has faltered ... This raises questions as to whether that buying - especially in high-carat gold jewellery - was just a post-pandemic buying spree which has now run its course,” said independent analyst Ross Norman. In Hong Kong, gold changed hands on par with global prices, said Stefans. In Singapore, gold traded between being flat and a $3 premium.