* Chinese markets closed for week-long holiday
* Singapore premiums at 80 cents-$1.30
By Rajendra Jadhav and Vijaykumar Vedala
MUMBAI/BENGALURU, Oct 5 (Reuters) - Higher domestic pricesdented demand for physical gold in India, prompting dealers tooffer the biggest discounts in 3-1/2 months this week, whileneighbouring Bangladesh approved its first policy to regulateimports and exports of the metal.
Some customers in Singapore and elsewhere in Asia cashed inon a slight dip in global prices earlier this week, even asmarkets in top consumer China were closed for the Golden Weekfestival.
In India, the second biggest gold consumer after China,dealers offered discounts of up to $6.5 an ounce over officialdomestic prices, the highest since mid-June, compared with $2discounts last week. The domestic price includes a 10 percentimport tax.
"Retail demand is weak due to the price rise. Buyers arewaiting for correction," said Harshad Ajmera, a gold wholesalerbased in the eastern city of Kolkata.
Earlier this week, gold futures in India hit theirhighest since June 15, at 31,350 rupees, while the rupee hit arecord low of 74.1 to the dollar on Friday. "Jewellers are not active due to a falling rupee.
International markets are also very volatile," said aMumbai-based dealer with a global trading firm.
India's gold imports were expected to rise in the fourthquarter. Demand usually strengthens at the end of the year, driven bythe wedding season and major festivals, when bullion buying isconsidered auspicious.
Bangladesh approved its first gold policy this week, whichwill facilitate the import and export of the metal, CabinetSecretary Shafiul Alam said.
Bangladesh's central bank will appoint dealers for importinggold bars, which were previously smuggled in because of theabsence of an import policy, he said.
In Singapore, premiums of 80 cents to $1.30 an ounce werecharged over global benchmark rates, versus $1-$1.50 last week.
"Somewhat surprisingly, the upward move in the U.S. dollargold prices this week triggered some of our larger customers inSingapore to make purchases," said Ronan Manly, precious metalsanalyst at Singapore-based dealer BullionStar.
"This may signal a confidence by those customers that thisweek's price recovery has legs and offers a good entry point atcurrent levels."
Benchmark spot gold traded between $1,184.21 and$1,208.32 per ounce this week. "If the price goes down by another $20, we will see demandemerging," a banker in Singapore said.
Premiums in Hong Kong were mostly unchanged at 70cents-$1.30.
"Demand should recover after October as we move into thefestive season," said Peter Fung, head of dealing at Wing FungPrecious Metals in Hong Kong.
In Japan, prices remained on par with the benchmark, aTokyo-based trader said.
($1 = 73.82 Indian rupees)
(Reporting by Vijaykumar Vedala and Sumita Layek in Bengaluru,Ruma Paul in Dhaka and Rajendra Jadhav in Mumbai; writing byArpan Varghese; Editing by Kirsten Donovan)
(If within U.S. call 651-848-5832); Reuters Messaging:vijaykumar.vedala.thomsonreuters.com@reuters.net))
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