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 Gold discounts in India widened this week to their highest in six weeks as a price rebound dampened purchases, while new import quotas failed to lift Chinese demand.

In India, the world's second-largest gold consumer, domestic prices were ruling around 71,900 rupees per 10 gram on Friday, after hitting a four-month low of 67,400 rupees on July 25.

"Jewellers were quite active in the market when prices were below 70,000 rupees. They made good purchases after the government cut import duty. Now, they are on the sidelines," said a Mumbai-based dealer with a private bullion importing bank.

Indian dealers offered a discount of up to $8 an ounce over official domestic prices, – inclusive of 6% import and 3% sales levies, up from last week's $6 discount.

In July, India slashed import duties on gold to 6% from 15%, a step aimed at tackling smuggling.

Retail demand has moderated due to the price rise, and buyers are waiting for prices to stabilise before making purchases, said a New-Delhi based bullion dealer.

Chinese dealers offered discounts between $1 and $10 per ounce on the international spot price, compared with $3-$18 last week. Top consumer China has seen lacklustre retail demand since May due to high prices and weak consumer sentiment.

"The recent issuance of import quotas by the People's Bank of China (PBOC) has not stimulated significant physical buying," said Bernard Sin, regional director of Greater China at MKS PAMP.

The PBOC had held off gold purchases for its reserves for a third straight month in July. It issued new quotas to several banks in August.

In Singapore, gold was sold between a discount of $1 and $2.20 premium. In Hong Kong, it was sold between at par to $2.00 premium.

Dealers in Japan sold bullion at $0.25 discount to $0.5 premium.