Physical gold rates flipped to a discount this week as local prices surged while China's discounts slipped further on weak retail demand, with silver emerging as a preferred asset in most Asian hubs.
Dealers offered discounts of up to $6 an ounce over official domestic prices in thin trade, versus last week's $2 premium.
Local gold futures soared to a record 50,948 rupees ($681.21) per 10 grams on Friday.
"Nearly 50% jewellery stores are closed due to the lockdown. Retail demand is weak, but could improve next month during the Onam festival," said B Govindan, chairman of Kochi-based Bhima Jewellery.
Global benchmark spot gold prices held near a nine-year peak, close to the $1,900 an ounce level, on safe-haven investment demand, while silver eyed its best week in over three decades.
In top buyer China, discounts widened to $37-$20 per ounce over global benchmark prices from last week's $30-$25, with activity still very quiet.
"People are taking advantage of the gold price to sell in the market," said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS, adding that investors were increasingly moving toward silver.
Dealers in Hong Kong charged anywhere between $0.5 per ounce discount to a $1.5 premium, while premiums in Singapore widened to $0.8-$1.50 an ounce from $1.50 last week.
Despite some buying from high net worth clients, a lot of retail investors and business were selling gold, Brian Lan, managing director at dealer GoldSilver said, adding, new clients emerged for silver after global spot rates breached $20.
In Japan, premiums of $0.25-$0.50 per ounce was charged.
Meanwhile, the Bangladesh Jewellers Association raised local rates to a record high, citing the rally in international markets.
The new rates, with the best quality gold priced at 72,783 taka ($860.01) per Bhori, or 11.664 grams, came into effect from Friday.