MUMBAI/BENGALURU (Reuters) – Physical gold demand perked up in top bullion consumer China on a dip in prices and optimism surrounding a U.S.-China trade deal, while buying picked up pace in the Indian market as domestic rates fell ahead of a key festival.

In China, premiums of about $13-$15 were being charged over the benchmark, marginally higher than last week’s $12-$14 range.

“Demand in China is doing a bit better because of the improvement in the talks between the U.S. and China (on trade),” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Gold premiums in the country have been on an overall upward trend recently, mainly due to gains in the domestic currency driven by hopes of a Sino-U.S. trade deal, analysts said.

U.S. President Donald Trump said Washington and Beijing were close to a deal, which could be announced in four weeks.

International benchmark spot gold’s break below the key psychological $1,300 an ounce level also invited some buying, traders said.

In the world’s second biggest bullion consumer India, a correction in domestic prices to their lowest level in three months lured buyers going into a key festival.

Indians will celebrate Gudi Padwa festival, also known as Ugadi in some parts of the country, on April 6.

“Jewellers are making purchases as retail demand is healthy at the current level,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the city of Kolkata.

Dealers were charging a premium of up to $1.50 an ounce over official domestic prices this week, unchanged from last week. The domestic price includes a 10 percent import tax.

Gold consumption for jewellery will rise 3 percent this year to 2,351 tonnes, driven by increases of 7 percent in India and 3 percent in China, which will counter lower demand in the Middle East, Metals Focus said earlier this week.

Meanwhile Japan, where gold was sold at par with the global benchmark, continued to see lacklustre demand as the industrial sector remained apprehensive about the state of the global economy, a Tokyo-based trader said.

In Singapore, premiums fell to 20-50 cents from 80-90 cents last week.

“Physical markets are very price sensitive. So if the U.S. dollar remains firm, gold in local currency will remain pricey and that will deter buyers,” a trader based in Singapore said.

In Hong Kong, premiums were unchanged at 50 cents to $1.20 an ounce.