Gold is trading at premium in India for the first time in more than two months on robust demand following a busy festival week, while a dip in global prices earlier this week helped bullion's appeal in some Asian hubs.
Dealers in India, the world's second biggest gold consumer after China, were charging a premium -- the first time since early September -- of up to $3 an ounce over official domestic prices this week.
Last week, they were offering a discount of $3. The domestic price includes a 10 percent import tax.
"After poor sales during Dusherra, jewellers were expecting weak demand even during Diwali. But surprisingly, demand was better than expected," a Mumbai-based dealer with a private bullion importing bank said on Friday.
Indians celebrated Dhanteras and Diwali festivals last week, when buying gold is considered auspicious. The Dusherra festival was on Oct. 19.
"Jewellery demand improved in last few days due to a correction in prices," Mangesh Devi, a jeweller in the western state of Maharashtra, said.
Local gold prices were trading near their lowest level in six weeks, as the rupee gained versus the U.S. dollar,, translating into cheaper rates in the international market.
The country's gold imports in October fell 43 percent from a year ago to $1.68 billion, pointing to lower supplies.
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