* India demand could improve in the second half of October-dealer
* Dussehra sales dropped 50% from a year ago- GJC chairman
* Gold premiums in Singapore little changed from last week
BENGALURU/MUMBAI, Oct 11 (Reuters) - Gold demand in top-consumer China was subdued this week as investors awaited outcome of crucial trade negotiations with the United States, while purchases in India during a key festival were lower-than-usual because of higher prices.
India celebrated Dussehra festival on Tuesday, when buying gold is considered auspicious.
"Consumers were struggling to adjust (to) the higher prices. Jewellers across the country have reported nearly 50% drop in Dussehra sales from a year ago," Anantha Padmanabhan, chairman of the All India Gem and Jewellery Domestic Council (GJC) told Reuters.
Gold futures were trading around 38,100 rupees per 10 grams on Friday after hitting a record high of 39,885 rupees last month. Gold prices have risen more than 21% so far in 2019.
Dealers offered discounts of up to $20 an ounce on official domestic prices this week, slightly down from a discount of $21 last week. The domestic price includes a 12.5% import tax and 3% sales tax.
"We were hoping (the) market will come to premium this week due to Dussehra and lower imports, but demand was very weak," said a Mumbai-based dealer with a bullion importing private bank.
Demand could improve in the second half of October due to Diwali festival and discounts could narrow, he said.
Gold imports in India plunged 68% year-on-year in September to their lowest in over three years as record domestic prices curbed retail buying, a government source said last week.
In China, bullion was sold at a $5-$8 per ounce premium over the benchmark with activity subdued even after the country returned from a week-long "Golden Week" holidays.
"Demand is still quite low at this level since people are uncertain of the political situation between U.S. and China," said Peter Fung, head of dealing at Wing Fung Precious Metals.
"When the Chinese market opened there was slight uptick in demand, but it is still slow as people are concerned about the trade war."
Washington and Beijing have been engaged in a 15-month long trade war and investors are hoping for a de-escalation or breakthrough in the trade talks between the two parties this week.
In Hong Kong, gold was sold at a premium of 50 cents to $1.30 an ounce. The ongoing protests in the region have led to the closure of malls, hurting jewellery sales, traders said.
Sellers in Singapore charged premiums between 50-80 cents an ounce over the benchmark, versus 50-70 cents last week.
Gold in Japan was sold at par with the benchmark, a Tokyo-based trader said, as bullion priced in Japanese yen remaining at elevated levels. (Reporting by Eileen Soreng in Bengaluru and Rajendra Jadhav in Mumbai; additional reporting by Karthika Suresh Namboothiri)