The price of gold snapped a five-day losing streak on Wednesday as bargain hunters re-entered the market.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery settled at $1,290.80 an ounce, up $10.80 or 0.8% from Tuesday's close at a 7-week low.

While gold is off more than $90 an ounce from its 2014 high struck in mid-March, Asian buyers appear to have returned to the market.

Chinese bullion buyers, who overtook India for the first time as top global consumers of the metal, are nothing if not price sensitive.

From premiums that topped out at $37 when gold was trading around $1,200 last year, traders on the Shanghai Gold Exchange are now offering gold at a discount to the quoted London spot price.

Driven in part by a weakening renminbi discounts on gold in China widened to as much as $9 an ounce below when the price were headed towards $1,400 in March.

That gap has now shrunk to $2–$3 an ounce as the lower gold prices drives fresh demand and could strengthen further if the yuan begins to appreciate again as expected.

Australia's ANZ Research reports its barometer of China's physical demand has increased sharply towards the end of March and the only reason for the discount is the weak yuan:

"A return to the CNY’s appreciation trend would be a crucial factor in improving the price differential. On current gold prices, had USD/CNY continued to trade at 6.05 (it’s level before the spike to the 6.20 area), the Shanghai premium would calculate to +USD32.0/oz."

Not everyone sees physical demand from Asia returning in a big way.

Bullion Vault quotes Deutsche Bank's commodities team as saying physical "tightness" in the market is receding with Shanghai premiums staying low and gold offered forward rates – the interest offered by bullion banks to gold borrowers – turning positive:

"We view it as only a matter of time before gold re-tests the [US Dollar] lows hit in December last year," says Deutsche, a market-maker for wholesale gold and silver in London.