A significant divergence has emerged in Asian gold markets, with premiums in India collapsing from decade-high levels while Chinese demand strengthened ahead of the Lunar New Year celebrations. Market data reveals Indian bullion dealers this week charged premiums of up to $70 per ounce over official domestic prices, representing a dramatic decline from last week’s $153 premium – the highest recorded since December 2013. This sharp contraction follows substantial price volatility that saw domestic gold prices swing between 133,687 rupees and a record 180,779 rupees per 10 grams, creating uncertainty among buyers. Market analysts attribute last week’s premium spike to anticipations of an import duty hike in India’s Union Budget, which ultimately maintained the existing duty structure when presented on February 1. Conversely, China demonstrated robust demand with premiums increasing to $35 per ounce above global benchmark prices, up from $32 the previous week. Regional variations persisted across Asia, with Hong Kong trading at par to $1.70 premiums, Japan offering discounts of $7 to $1 premiums, and Singapore trading at discounts of $0.50 to premiums of $3. Peter Fung, Head of Dealing at Wing Fung Precious Metals, noted that ‘consumers still have interest in buying jewellery on the downside while physical investment demand is very good.’ The market shift comes as spot gold prices have retreated more than 13.5% since hitting a record high of $5,594.82 on January 29. ANZ analyst Soni Kumari observed that ‘the correction in gold and silver prices came at the right time, just before the Chinese New Year,’ potentially stimulating further demand. This market realignment occurs against the backdrop of China’s evolving gold consumption patterns, where 2025 marked the second consecutive annual decline but saw investment products (bars and coins) surpass jewelry purchases for the first time, reflecting growing safe-haven demand among Chinese investors.