High gold prices kept physical demand tepid in key Asian centres this week, prompting dealers in India to extend discounts after a key bullion-buying festival spurred limited activity.

India celebrated Akshaya Tritiya, its second-biggest gold-buying festival after Dhanteras, on Saturday.

“Consumers made purchases on Akshaya Tritiya and even a day after the festival”, but demand was lower than normal amid record prices, said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsingji.

Local gold prices were trading around 59,770 rupees ($730.80) per 10 grams, not far from a record high of 61,399 rupees hit earlier this month.

Dealers offered discounts of up to $12 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — versus $16 discounts last week.

Jewellers bought less gold than normal from banks as many retail consumers replaced old jewellery for new, said a Mumbai-based bullion dealer with a private bank.

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Chinese dealers charged premiums of $2-$9 an ounce over global benchmark spot prices.

The dip in physical purchases could be attributed to “a shift in consumer sentiment towards other investments… there could be seasonal aspects at play,” said Bernard Sin, regional director, Greater China, MKS PAMP, adding that purchases might not pick up in the short term.

However, several analysts said persistent fears about the global economic outlook triggered some demand for the safe-haven metal.

“Coins and bars are outstripping jewellery demand as Chinese investors seek a financial safe haven,” said independent analyst Ross Norman.

Hong Kong dealers charged $0.50-$2.50 premiums. Peter Fung, head of dealing at Wing Fung Precious Metals, said tourists from Mainland China could spur some demand ahead of the May Day holiday.

Singapore dealers charged $1.50-$2.50 premiums, while in Japan, gold was sold anywhere on par with global rates to $0.5 premiums.