World's largest gold consumer India's imports this year is likely to hit the 1000 ton mark, analysts said.
Customers looking at gold jewelry
NEW DELHI (BullionStreet) : World's largest gold consumer India's imports this year is likely to hit the 1000 ton mark, analysts said.
According to country's leading gold body, the Bombay Bullion Association,gold mports may be between 950 metric tons and 1,000 tons this year after country's consumption rose to a record 963.1 tons last year.
Analaysts said Indian consumers chose peak festival season of Diwali to purchase gold which will push up import requirements, despite rupee's more than expected depreciation in recent months.
India's local currency, Rupee depreciated by more than 8% in September alone to hover around a 28-month low.
India imported 958 tons of gold last year, the highest ever. During the first six months of this year, the import has already crossed 553 tonnes.
The country usually imports around 700 tonne to 800 tonne of gold a year, although high inflation and more rural income following good monsoon rains pushed up demand for overseas purchases in 2010.
The country's total gold ETFs investment has reached 15 tonnes, which is expected to double in a year. However, the jewellery demand is likely to decline due to rise in recycled gold in the market, he said.
India has to meet its appetite almost entirely with imports as the country has one operational goldmine at Kolar in the southern state of Karnataka.
People in India holds more than18,000 tonnes of gold which is more than twice the size of the 8100 tonnes held by the world's largest official gold holder, the US.