A festival-led buying spree continued in India's retail gold market this week, though premiums eased slightly from a week ago and sales volumes were seen as lower year-on-year.

Discounts in top consumer China narrowed further meanwhile even as demand remained relatively negligent.

Diwali buying seems to be still on in India. Jewellery showrooms have been witnessing higher footfalls for the last few days. Retail jewellery demand has improved.

Dealers charged premiums of about $2 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, down from $4 last week.

Though buyers were seeking out gold, overall demand is still expected to be down year on year by 10%-30% in tonnage terms, though it may be stronger in U.S. dollar terms.

On November 20, local gold futures were trading around 50,083 rupees per 10 grams, still at historically elevated levels but more than 10% below the all-time high of 56,191 rupees they hit in August.The correction lured many buyers who had been put off by higher prices.