Asia Gold-Indian weddings, softer price lift premiums

* Premiums firm to 50 to 70 cents in Hong Kong

* Gold slips to 3-week low before bouncing

* Marriage-related buying picks up in India

SINGAPORE/MUMBAI, Oct 27 - Jewellery makers across Asia returned to the physical market on Tuesday after gold prices dropped to a three-week trough, while weddings in India helped lift premiums, dealers said.

India's festival season peaked with Diwali, the festival of light, two weeks ago, but the marriage season runs until December. Weddings take place during festivals in the world's main consumer, where jewellery forms an essential part of women's dowry basket.

"Demand is emerging as prices have come back to the stable level we have seen in the last two months. Marriage-related buying is there, but people who postponed buying earlier are buying more," said Jayanti Lal of Mahavir Bullion Corp, a wholesaler in Vijayawada in southern India.

"Since prices fell yesterday, today people are waiting and watching. They think it is a good level, but will come to buy only at the end of the day. They are hoping for more falls."

Gold <XAU=> fell as low as $1,036 an ounce, its weakest since Oct. 6, before bouncing to around $1,041 on bargain hunting. Bullion was nearly 3 percent below a lifetime high of $1,070.40 struck on Oct. 14 after a recovery in the dollar spurred selling.

Premiums for gold bars firmed to 50 to 70 U.S. cents to spot London prices in Hong Kong from 20 cents last week, although there were also offers at 30 cents. <GOLD/ASIA1>

"We've seen some physical buying today. If the dollar continues to recover, there will be pressure on the topside," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.

"Of course, this a correction right now. I think the long-term trend is still bullish for gold," he added.

Dealers said worries that gold's decline would be short-lived could spur more buying at lower levels, especially after India recorded better-than-expected festival sales in October despite record prices.

Indians bought 56 tonnes of gold during this year's Dhanteras and Diwali week from Oct. 12 to Oct. 19, up 5.7 percent from the same period last year, the World Gold Council said. [ID:nBMB008758]

"Markets have still not fully opened today, but demand should do okay. People should buy dips as longer term gold looks good," said D.P. Naresh of Micro International, a wholesaler in India's southern software city of Bangalore, home to several tech firms. Premiums were steady in Singapore at 60 to 70 U.S. cents an ounce, while gold bars remained at a discount of $1 in Tokyo, because of persistent sales by retail investors.

"We are seeing some liquidation from the general public but the volumes are much smaller compared with last week," said a dealer at one of Japan's main bullion trading houses.

Gold rebounded from three-week lows as the U.S. dollar took a break after a rally, spurring demand from bargain hunters and lifting other precious metals. [GOL/]