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Demand for physical gold eased in India \u200bthis week as volatile prices amid escalating Middle East conflict deterred buyers, while premiums in China \u200cheld firm on a pickup in investment demand.<\/strong><\/p>\n Airspace closures across the region have sharply reduced supplies, narrowing discounts in India.<\/p>\n \u201cRetail buyers (in India) are struggling to digest the hefty price hike. At these levels, buying gold is becoming unaffordable,\u201d \u200bsaid Varghese Alukka, managing director of jeweller Jos Alukkas, based in Thrissur in the southern \u200bstate of Kerala.<\/p>\n Domestic gold prices in India were trading around 160,000 rupees ($1,745.96) per \u206010 grams on Friday, after rising to 169,880 rupees earlier this week.<\/p>\n Bullion dealers in the region \u200boffered discounts of up to $28 per ounce to official domestic gold prices this week, inclusive of 6% import and \u200b3% sales levies, compared with last week\u2019s discount of up to $65 \u2013 a 10-month high.<\/p>\n Gold imports to India from key supplier the United Arab Emirates have nearly halted due to widespread flight cancellations and airspace closures following the conflict in the Middle East, helping \u200bnarrow discounts, said a Mumbai-based dealer with a private bank.<\/p>\n \u201cWedding season demand is still weak. Buyers are \u200bholding off on purchases because prices are so volatile,\u201d he added.<\/p>\n In India, weddings are a major driver of gold purchases, with \u200cjewellery forming \u2060a crucial part of a bride\u2019s attire and a common gift from family and guests.<\/p>\n Meanwhile, physical gold demand in Chinese markets remained robust despite higher spot prices.<\/p>\n Gold traded at premiums of $13-$15 an ounce over global benchmark prices this week, slightly above last week\u2019s $12-$13 premium.<\/p>\n A steady premium \u201cmeans physical (gold) demand is still very steady (in China), even after \u200bthe gold price was \u200babove $5,000\u2026 you can see \u2060people continue to buy some gold for long term investment,\u201d said Peter Fung, head of dealing at Wing Fung Precious Metals.<\/p>\n Spot gold jumped more than 8% in \u200bFebruary, extending gains for a seventh straight month amid heightened global political and economic uncertainties.<\/p>\n Prices \u200bwere largely \u2060volatile and has fallen about 3% so far this week on fading interest rate-cut prospects and inflation concerns due to higher energy prices. Prices were around $5,135 per ounce on Friday.<\/p>\n In Hong Kong, physical gold traded at \u2060par \u200bto premiums of $2, while in Japan , gold was sold at \u200bpar to premiums of up to $1.<\/p>\n In Singapore , gold was traded at a premium of about $2.25, lower from premiums of $3.50-$4.80 last week.<\/p>\n ($1 = \u200b91.6400 Indian rupees)<\/p>\n<\/div>\n