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 Gold premiums in India more than halved from decadal highs this week as price volatility deterred buyers, while a pullback from record prices lifted demand in China ahead of the Lunar New Year.

Bullion dealers this week charged a premium of up to $70 per ounce over official domestic gold prices, inclusive of 6% import and 3% sales levies, down from last week's $153 premium, the highest since December 2013.

"Buyers were confused by the price swings this week and had trouble figuring out the bigger price trend," a Mumbai-based jeweller said.

Expectations of an import duty hike in the budget lifted gold premiums last week, but they fell as demand slumped, said a Mumbai-based dealer with a bullion importing bank.

India's Finance Minister presented the 2026/27 Union Budget on February 1, leaving the duty structure unchanged.

Domestic gold prices were trading around 150,000 rupees per 10 grams on Friday, after hitting a record high of 180,779 rupees last week before sliding to as low as 133,687 rupees this week.

In China, bullion traded at a premium of $35 an ounce above the global benchmark spot price this week, up from last week's $32 premium.

"So we can see that consumers still have interest in buying jewellery on the downside while physical investment demand is (also) very good," said Peter Fung, head of dealing at Wing Fung Precious Metals.

Spot gold prices are down more than 13.5% since hitting a record high of $5,594.82 on January 29. [GOL/]

"The correction in gold and silver prices came at the right time, just before the Chinese New Year," said ANZ analyst Soni Kumari.

China's gold consumption dropped for a second consecutive year in 2025, but sales of bars and coins, fuelled by growing safe-haven demand, overtook jewellery purchases for the first time, the China Gold Association said.

In Hong Kong, gold traded at par to premiums of $1.70, while in Japan, bullion was sold at discounts of $7 to a $1 premium.

In Singapore, gold was sold at a discount of $0.50 to premiums of up to $3.