Gold Demand in India Likely to Recover to Pre-Crisis Level: WGC.

Gold demand in India is likely to robust and reach near the pre-credit crunch level triggered by global economic crisis in 2009 and will give boost to the imports, a World Gold Council report today said.

"India is the largest gold market in the world and, as such, the likely recovery of local demand to pre-crisis levels is of considerable strategic importance to the wider gold market," WGC Investment Research Manager Eily Ong said in a statement here.

The report, India: Heart of Gold, said the current demand trend for the yellow metal suggested a robust year-on-year recovery in imports from the 2009 levels. Gold imports stood at Rs 88,100 crore in 2009, WGC said.

"As consumers have adjusted their price expectations upwards, a further rise in gold jewellery and investment demand is anticipated and this trend is projected to continue over the long-run as local investors are buying gold driven by wealth accumulation motives," he said.

The rise in gold jewellery and investment demand is anticipated and this trend is likely to continue over the long-run as local investors are buying gold mainly driven by wealth accumulation motives.

Despite the rising price investment demand for gold jewellery remained robust emphasising that domestic consumers purchase the yellow metal mainly because of its allure as a hedge to offset the effects of depreciation and erosion of both savings and income, it said.

The country currently has one of the highest saving rates in the world that is estimated at around 30 per cent of total income, of which 10 per cent is invested in gold, the WGC report said.

Source : indianexpress.com