Physical gold demand in major Asian hubs stalled this week as higher prices kept buyers at bay, while the precious metal was offered at a discount in India after festival buying diminished.

"Demand usually moderates after Diwali. This year since prices are rising buyers are taking a pause," said Ashok Jain, proprietor of Mumbai-based wholesaler Chenaji Narsinghji.

Indians celebrated Dhanteras and Diwali festivals last week when buying gold is considered auspicious.

Dealers were offering a discount of up to $2 an ounce over official domestic prices - inclusive of the 10.75% import and 3% sales levies - this week, down from last week's premium of $1.5.

Retail sales were higher-than-normal during Diwali and jewellers need to replenish inventory, but they are waiting for a price correction, said a Mumbai-based dealer with a bullion importing bank.

On Friday, local gold futures were trading around 49,100 rupees per 10 grams, after rising to 49,380 rupees on Thursday, the highest level in five months.

Meanwhile, premiums in China edged lower to $2-$5 an ounce from last week's $3-$6 an ounce charged over benchmark spot prices.

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"The physical gold market has slowed because of the higher prices... From here we can see some profit-taking and liquidation in physical markets," said Peter Fung, head of dealing at Wing Fung Precious Metals.

Spot gold prices were on pace to post their second straight weekly rise of about 2%.

In Singapore, premiums were at $1.50 to $1.80 an ounce.

"Most are selling to take profits from their purchases made last year or earlier," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

"However, for the wholesale side, we still see good demand and this is probably due to the pent up jewellery demand from the retail customers."

In Hong Kong, premiums were at $0.5-$1.5 an ounce, while the premium was at $0.2 per ounce in Japan.