Imports of gold by India, the world’s biggest consumer of the precious metal, are said to go at its peak record this 2011 as investors are turning on to gold as their safe investment haven to fight inflation and volatility that has been witnessed in the stock markets.
The gold imports are estimated to be from 950 metric tons and 1,000 tons this year, according to Prithviraj Kothari who is the president of the Bombay Bullion Association during a conference in Kovalam, India.
Consumption in India has gone up to 963.1 tons in 2010 which has driven the bullion imports to its peak at 958 tons, according to records from the World Gold Council.
Increasing Indian imports of gold may push the 30% rally in the cost of gold to its peak that has made it the number two best performer in the Thomson Reuters/Jefferies CRB Index of 19 raw materials in 2011. Bullion is on its way for the 11th yearly gain as the EU debt crisis and the US economic downgrade has boosted the demand for gold.
According to Kothari, “The equity market is volatile and property prices are too high, driving people toward gold as an investment. The rains have been good so far, so we can expect good demand for festival season this year.”
India’s purchases of gold has gone up by 60% to 267 tons in the second quarter of the year from 167 tons in the same period last year.
Tags: stock markets, Property prices, crb index, stock market, gold imports
