Gold imports may touch 800 tonnes by Dec: WGC

Written by Press Trust of India | Mumbai | Updated: Nov 26 2012, 05:55am hrs
Indias net gold import for domestic consumption is likely to be about 800 tonnes this year with bullion purchase gaining momentum during the festive season, according to the World Gold Council (WGC).

In 2011, the net import for domestic consumption stood at 969 tonne.

The demand was not that great in the first two quarters due to the economic downturn, monsoon deficit, duty issues and jewellers strike and high prices. However, it picked up last month in the festival season and this year we expect gold import to be around 800 tonne, WGC director, investment, Amresh Achrya said.

Last year, he said, was an extraordinary year and the demand was very high and so were the imports. In the long run, he said, the demand for the precious metal remains strong.

Talking about China, he said, though the demand during the third quarter was weak, it is picking up. The fourth quarter is usually strong due to the festive season. By the end of this year, we still hope that China may still become the largest importer of the yellow metal overtaking India by a whisker, he said. India is just 20 tonne ahead of China at present.

China is not only becoming one of the largest consumer, but is also one of the major producers of the metal. The jewellery demand in China is very high, driving the imports, WGC director, investment, Stephen Richardson said.

Jewellery is the largest growth driver for the yellow metal. However, with increasing awareness, gold exchange-traded funds (ETFs) are also gaining ground globally, he said. The investment is catching up in the mature markets and will become one of the a major growth driver for gold in future, he added. Even in India and China, where the ETFs saw a slow start, their demand is growing, he said.

In both the markets, ETF is not very high. There is a need for more awareness and the market to become sophisticated for the ETF to gain more grounds.

The investment demand in India for January to September stood at 207.3 tonne (R58,725.1 crore).