Demand for gold in India, the world's second-largest consumer, picked up as the festive season began and discounts narrowed, while demand across rest of the Asia continued to improve.

Gold traded within a narrow range throughout the week, after falling nearly 5 % in the previous week.

Gold discounts in India narrowed to the smallest level in nearly nine months as prices fell during a key Hindu festival Dussehra boosted retail demand.

Dealers were offering gold at $2 an ounce discounts to official domestic prices this week, the narrowest since the week ending on January 23. Last week discounts were $4.

                  “During Dussehra demand was very good. Jewellery shops were crowded after a long time,” said Fatechand Ranka, a jeweller based at Pune in western state of Maharashtra. India celebrated the Dussehra festival on Tuesday.

“At the end of the month we have Diwali festival. If prices remain at the current range, then certainly demand will remain robust even during Diwali.”