Gold Imports Spurt 60% In First Quarter.

Gold imports into India, the world’s biggest buyer of the yellow metal, jumped 60 per cent to 267 tonne in three months till June (first quarter), as investors stepped up purchases to protect their wealth from inflation, the World Gold Council (WGC) said on Thursday.

“With inflation reaching record numbers and there being extreme volatility in the equity markets, investments in gold continues to prove popular as investors look to diversify their portfolios,” said Ajay Mitra, managing director with WGC — India and Middle East. India’s investment demand jumped 78 per cent to 108.5 tonne, while jewellery demand rose 17 per cent in the second quarter to 139.8 tonne.

Gold imports, which stood at 553 tonne for the January-June period, could cross the 1,000 tonne mark this year amid strong demand, WGC said. “The first half performance was very strong and if this trend continues and Q3 imports reaches 170-180 tonne and Q4 around 250 tonne, then we may cross the 1,000 tonne mark this year,” Mitra said.

The total gold imports in 2010 was 958 tonne. Inflationary pressure is likely to continue along with volatility in the equity markets, which will make gold attractive for investors looking to diversify their portfolios and protect their wealth, he said.

Talking about buying trend in Q3, Mitra said the trend of buying little bit of gold like coins is likely to continue. “People purchasing small amount, like coins, more often will continue in Q3. However, due to wedding season and festivals, the demand for heavy jewellery will be more,” he added. Jewellery consumption increased by 43 tonne in the first six months of this year at 346 tonne compared to 303 tonne in the same period last year.

There is also a decline in supply of recycled jewellery in the market this year, Mitra said quoting the Gold Demand Trends report for Q2, 2011.

In Q2, 2011, recycled jewellery was 10 tonne compared to 20 tonne in the corresponding quarter of 2010.

Source : indianexpress.com