High domestic prices restrained physical gold demand in India this week, while uncertainty surrounding Taiwan-related developments prompted bullion importers in China to hold off on big purchases.
Indian gold prices hovered close to an over three-month peak of 53,113 rupees per 10 grams hit on Aug. 4.
Retail demand has been weak for the past few weeks as buyers were waiting for a correction, said Ashok Jain, proprietor of Mumbai-based wholesaler Chenaji Narsinghji.
Dealers offered discounts of up to $14 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — unchanged from last week.
Jewellers received good orders during last week's The India International Jewellery Show and were hoping festival season could be good this year, said a Mumbai-based dealer with a private bank.
Chinese premiums narrowed to $5-$9 an ounce over international spot prices, from $4-$11 last week.
"As China continues to patrol near Taiwan, no one is importing large amounts and everyone is unsure about the implications" for China-U.S. relations, said Bernard Sin, regional director, Greater China at MKS PAMP.
The People's Bank of China controls how much gold enters China via quotas to commercial banks.
Hong Kong dealers sold gold between on par with the benchmark to $2 premiums.
"We could see elevated premiums for physical gold and silver for the rest of the year. While this could dampen demand in the short term, it would be easily overlooked by consumers if a repeat of the 2020 price rally happens," said Vincent Tie, sales manager at Singapore dealer Silver Bullion.
Premiums of $1.50-$2.30 were charged in Singapore.
Brian Lan, managing director at dealer GoldSilver Central, said wholesalers are ramping up purchases to prepare for upcoming festivities. They also need to pick up production and increase their range as the world opens up and more tourists come in, he added.
(Reporting by Bharat Govind Gautam and Arundhati Sarkar in Bengaluru, Rajendra Jhadav in Mumbai; Editing by Devika Syamnath)