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MUMBAI/BENGALURU (Reuters) - Gold demand picked up slightly across Asia this week, fuelled by a drop in international prices as the dollar gained on expectations of a near-certain increase in U.S. interest rates, traders and market participants said.
The price of gold fell to its lowest in more than five weeks on Friday as traders took to the sidelines ahead of U.S. payrolls data, which will be closely watched for clues on the outlook for U.S. monetary policy.
In top consumer China, physical demand for gold has been strong, traders said, with premiums quoted between $15 and $17 an ounce over international spot prices, as against the $9-$12 levels seen last week.
"We are starting to hear clients coming and enquiring about inventories, so we expect physical demand to increase," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.
Singapore prices were seen at a premium of 90 cents to a dollar. Hong Kong prices were quoted at a premium of 70 cents to $1, compared with 50 cents to $1.10 a week earlier.
Prices in Japan were at a discount of 75 cents to $1, compared with the 50 cents-to-$1 discount range seen last week.
"In Japan, there has been a slight pick-up in demand, especially from the industrial sector as local prices start to ease," a Tokyo-based trader said.
Meanwhile, bullion prices in India reached a premium this week, though retail demand remained subdued.
Dealers in India, the world's second-largest consumer of the metal, were charging a premium of around $2 an ounce over official domestic prices, compared with a discount of $3 last week. The domestic price includes a 10 percent import tax.
"A lot of gold imported above $1,230 (an ounce) is unsold. That's why everyone is trying to charge a premium despite the weak demand," said a Mumbai-based dealer with a private bank.
India's February gold imports surged to 50 tonnes, up more than 82 percent from a year earlier, on pent-up jeweller demand.
"Retail demand for the wedding season has tapered off. Many consumers are postponing purchases to next month due to children's exams," said Fatechand Ranka, a jeweller based in Pune, Maharashtra.
"If prices remain at about 28,000 rupees, then demand will be good during upcoming festivals," Ranka said.
In the local market, gold futures were trading around 28,250 rupees per 10 grams on Friday. They have fallen more than 5 percent in two weeks.
Reporting by Arpan Varghese in Bengaluru; Editing by Sherry Jacob-Phillips and Dale Hudson