* Higher prices dampen appeal
* China premiums firm slightly to $4-$8 an ounce
* Spot gold on track for 3rd straight weekly gain
* Dealers in India offer up to $6/ounce discount
By Rajendra Jadhav and Karthika Suresh Namboothiri
MUMBAI/BENGALURU, Jan 4 (Reuters) - Gold discounts in India widened to a two-month high this week as prices surged to a more than six-month peak and demand remained subdued due to New Year holidays.
Benchmark spot gold prices were headed for a third straight weekly gain due to concerns over a slowdown in global economic growth, and tumultuous stock markets.
Dealers in India were offering a discount of up to $6 an ounce over official domestic prices this week, up from a discount of $2 last week. The domestic price includes a 10 percent import tax.
“In physical market demand is negligible. Retail consumers are not comfortable with higher prices,” said Chanda Venkatesh, managing director of CapsGold, a bullion merchant based in the southern city of Hyderabad.
Local gold prices earlier this week jumped to their highest in three weeks following overseas markets, although a stronger rupee capped the upside.
In some parts of the country, retail demand was subdued due to Khar Mass, Venkatesh said.
Khar Mass is a month in the Hindu calendar from Dec. 16 to Jan. 14 which is considered inauspicious and people avoid weddings, buying gold or property during the period.
“Jewellers were postponing purchases. They are not sure whether prices will sustain at the higher level,” said a Mumbai-based dealer with a bullion importing bank.
In China, the world’s leading gold buyer, demand remained low for most of the week. Premiums slightly firmed towards the end of the week, to a range of $4-$8 an ounce from last week’s $3-$7.
In Hong Kong, premiums were little changed at 70 cents to $1.40, compared with 80 cents-$1.30 last week.
In Singapore, premiums stood unchanged at 60 cents to $1.50 over the benchmark.
“On the physical front it has been quiet, because gold prices rose sharply,” said Brian Lan, managing director at Singapore dealer GoldSilver Central.
“People have got their bonuses. We see gold prices coming up. But, the Chinese new year is also around the corner and there could be some buying going forward.”
In Japan, gold continued to be sold at par with the benchmark on lack of demand due to holidays, a Tokyo-based trader said. (Reporting by Karthika Suresh Namboothiri and K Sathya Narayanan in Bengaluru and Rajendra Jadhav in Mumbai; writing by Nallur Sethuraman; Editing by Subhranshu Sahu)