* India gold discounts surge to $25/oz from $15 last week
* Jewelers hit by robust gold prices - traders
* Chinese premium falls to $12-$14 this week from $14-$20
* India's gold market: http://tmsnrt.rs/2b1Tl6J
MUMBAI/BENGALURU, June 28 (Reuters) - Gold discounts in India widened to the highest in nearly three years this week, with demand subdued in major Asian centers as a rally in bullion prices to multi-year highs curbed purchases.
Indian dealers were offering a discount of up to $25 an ounce over official domestic prices, the highest since September 2016. This compares with a discount of $15 offered last week. The domestic price includes a 10% import tax and 3% sales tax.
"Prices have risen too much in a short span. Customers are waiting for a correction," said B Govindan, president of All Kerala Gold and Silver Merchants Association.
Gold prices <XAU-24C-PB> in the world's second biggest consumer hit a record high of 35,4960 rupees per 10 grams earlier this week, tracking gains in the world market.
Jewelers have nearly stopped buying gold due to negligible retail demand and rising supplies of old jewelry, according to a Mumbai-based dealer with a bullion importing bank.
"Gold imports will fall sharply in June," the dealer said.
India's gold demand could fall 10% in 2019 to the lowest in three years as record high local prices dent retail purchases during a key festive season, the head of an industry body told Reuters.
Demand sagged in other Asian hubs as well, with benchmark spot gold prices rallying to multi-year highs.
Spot gold has gained more than 8% so far in June, its best monthly performance in three years, propelled by a weaker dollar, prospects of monetary easing by major central banks and escalating U.S.-Iran tensions.
In top gold consumer China premiums ranged between $12 and $14 per ounce over the global benchmark, down from $14 to $20 charged last week.
Demand for physical gold has been weak as the price increase has driven buying of paper futures rather than the metal itself, said a Shanghai-based trader.
Markets in Singapore and Hong Kong saw premiums remaining flat at around 40-60 cents and 50 cents-$1.20 respectively, with customers selling back gold to lock in profits.
Asian centers saw high volumes of scrap gold as customers resorted to selling back gold to take advantage of higher prices, a Singapore-based bullion trader said.
Japanese investors were also in a selling frenzy with prices surging to multi-year highs, a Tokyo-based trader said. The metal was being sold at a $1 discount in the market, unchanged from last week.
(Reporting by Rajendra Jadhav in Mumbai, Eileen Soreng in Bengaluru; Editing by Jan Harvey)