India Gold Imports To Hit Record High In 2011 .

Gold imports by India, the largest consumer and importer of the yellow metal in the world, is going to touch a record high in 2011 despite the high prices of gold.

According to initial estimates by the Bombay Bullion Association (BBA), imports of gold by India is steady and strong and could hit a record of 800 tons this year.

“Gold import by India is going up every month despite the high gold prices. Strong jewellery sales and consumer investment demand for gold are the main drivers for the surge in gold imports,” a BBA official said.

According to unofficial estimates of BBA, gold imports by India could touch or exceed 800 tons in 2011 if the current trend continues. “In the first two months of January and February, gold imports have been strong. The trend is continuing in March also,” he said.

Recently, the World Gold Council (WGC) had said that strong gold jewellery sales by India, the largest consumer of the yellow metal in the world, helped boost gold imports to the country in 2010.

According to WGC statistics, gold imports by India, the largest consumer in 2010, exceeded 2009 levels as consumers boost jewelley purchases.

Imports totaled 624 metric tons by the end of the third quarter, compared with 559 tons in all of 2009, according to data released in a report by WGC. India bought 214 tons in the third quarter, up from 176 tons a year earlier, it said.

Jewelry demand in India surged 36 percent in the third quarter even as gold prices gained. Consumers in India purchased 184.5 tons of gold in the third-quarter for jewelry, up from 135.2 tons a year ago, the report said. Total gold demand in India rose 28 percent in the period.

In the last eight years from 2000, gold imports by India every year have been between 400-800 tons. In 2008, India's gold imports dipped by 45 percent to touch 450 tons; Indians consumed 501.6 tons in 2008. Global economic meltdown, uncertainty in stocks and commodities markets and volatility in gold prices had a major impact on India's gold imports in 2008.

India imported 722 tons of bullion in 2007, less than the 1,000 tons estimated by the WGC at the beginning of the year.

Gold imports in 2006 were 715 tons, which grew only 4 percent from 1997, while prices soared 128 percent in the same period, according to a WGC data.

Meanwhile, gold bullion imports through the India hub of Ahmedabad have risen to a six-year high, according to the city's air cargo operators.

"Compared to 2009-10, the gold import at Ahmedabad has increased by more than 15% in [the last 11 months of] 2010-11," says Samir Mankad, CEO of GSEC Ltd at the city's airport, speaking to the DNA newswire.

Gold imports through Ahmedabad fell below 155 tonnes in 2008-09, when the global financial crisis saw India – the world's No.1 consumer nation – become a net exporter of gold for the first time since the 1930s' Great Depression.

Last year saw Indian gold demand – sourced almost entirely from imports and recycled jewelry, as the country has no domestic mine output – surge by 66% from the depressed levels of 2009, according to data from market-development body the World Gold Council.

"Two years back, due to global recession and slowdown in India, many could not invest in gold," says Gold Bullion trader and analyst Girish Chokshi, also quoted by DNA.

"Now, they don't want to miss it again. The import has gone up because the demand is aggressive."

"The present gold buyers are probably the same who missed the opportunity two years back," agrees Manoj Soni of AB Jewls, adding that "rural areas contributed the most in gold demand" as farmers took profits on real estate, and put the money raised straight into gold bullion."

Source : commodityonline.com