India flips to discount of 7oz this week
China premiums rise to 2635oz
Demand picks up in Japan after holidays traders

Reuters Demand for physical gold was much lower than usual during a key festival in India, the world39;s secondbiggest consumer, as nearrecord high prices deterred retail buyers and forced dealers to offer steep discounts.

Akshaya Tritiya, the secondbiggest goldbuying festival after Dhanteras, was celebrated on Friday.

Many consumers opted for token purchases of small denomination coins. Jewellery demand was very weak compared to last year, said a Mumbaibased jeweller, who said his sales during the festival amounted to only about twothirds of the numbers seen last year.

We were not expecting demand to rise or match last year39;s level. But the drop in demand was far bigger than our expectations.

Domestic prices were trading around 72,700 rupees per 10 grams on Friday, not far from a record high of 73,958 rupees hit last month.

Prices have risen more than 21 since the last Akshaya Tritiya festival.

Retail buyers are struggling to swallow the recent price increases, which have badly affected their purchasing power, said Prithviraj Kothari, president of the India Bullion and Jewellers Association.

Indian dealers offered discounts of up to 7 an ounce over official domestic prices inclusive of 15 import and 3 sales levies versus last week39;s 1 premium.

In top consumer China, dealers charged premiums of 2635 per ounce over benchmark spot…