Physical gold rates in India flipped to a discount for the first time in over two months this week as a rise in local prices curbed demand, while buying in China was expected to pick up after the Golden Week holiday.

Dealers in India offered discounts of up to $2 an ounce over official domestic prices – inclusive of 10.75 per cent import and 3 per cent sales levies – down from last week’s premium of $4.

“Demand is subdued from jewellers since prices are going up. Jewellers and dealers are waiting for a correction,” said Mukesh Kothari, director at Mumbai bullion dealer RiddiSiddhi Bullions.

Local gold futures were trading around 46,900 rupees per 10 grams on Friday, after falling to 45,479 rupees last week, the lowest since April 6.

A depreciation in the rupee lifted local prices and prompted jewellers to postpone purchases, said a Mumbai-based bullion dealer with a private gold importing bank, adding premiums may return as demand is likely to improve during the 10-day Dussehra festival.

Demand in top consumer China, meanwhile, was expected to rise after a long holiday as prices softened, with premiums of about $8-$9 an ounce charged over global benchmark prices , against $12 last week.

“People are hesitating to purchase as they prefer to wait and buy at lower levels. The dollar is also very strong,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

In Singapore, “demand for gold and silver has been boosted as investors realise that the metal’s prices are stabilising in their lower range,” said Joshua Rotbart, managing partner at J. Rotbart & Co in Hong Kong.

Premiums were around $0.75-$1.80 an ounce, versus last week’s $1.20-$1.60.

“We continue to see value-buying of gold at current prices from contrarian-minded investors,” said Vincent Tie, sales manager at Singapore dealer Silver Bullion.

Demand in Hong Kong and Japan remained subdued.