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A pullback in domestic prices for physical gold from record highs lured back some buyers in India this week and prompted dealers to slash discounts to a 10-week low, while the bullion market in top hub China saw subdued activity.

Indian dealers offered discounts of up to $5 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — versus last week's $11 discount.

"Retail buying has been improving slowly. Footfalls at jewellery stores have improved because of lower prices," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsingji.

Local gold prices were trading around 59,900 rupees per 10 grams on Friday after hitting a record high of 61,845 rupees earlier this month.

Scrap supplies have also come down after a correction in prices, said a Mumbai-based dealer with a private bullion importing bank.

India's April gold imports plunged 45% from a year earlier to 16 tonnes as the rally in local prices curtailed demand during a key festival, a government source said on Tuesday.

In China, premiums of $2 to $4 were charged.

A weaker Chinese yuan versus the U.S. dollar deterred buyers using the domestic currency, increasing the cost of importing or sourcing bullion from abroad, said Bernard Sin, regional director, Greater China at MKS PAMP.

The offshore yuan weakened past the key 7 per dollar mark on Wednesday amid geopolitical tensions and more signs of China's post-COVID recovery losing steam.

Peter Fung, head of dealing at Wing Fung Precious Metals, however, noted some buying activity after global spot prices slipped below $2,000 per ounce. [GOL/]

In Hong Kong, gold was sold anywhere on par with the benchmark to $2 premium.

Some Japanese dealers also sold bullion at par with global prices, while others charged a $0.50 premium.

In Singapore, premiums of $0.50 to $2 were charged.