India Nov Gold Imports Seen up at 34 T on Festival Buys.

India's gold imports in November are seen rising to 34 tonnes, up more than 10 percent on the year, on spending for festivals and investment, but some sellers said record high prices have curbed appetite for the metal.

"Looking at the way prices have risen, demand for gold can be said to be very good," said Suresh Kumar, managing partner of Visakha Bullion Corp, a wholesaler in Visakhapatnam.

The median of a poll of 10 gold importers, wholesalers, retailers and a trade body showed they expected India, the world's largest market for gold, to import 34 tonnes this month, up from 30.7 tonnes imported last November, when the worst drought in nearly four decades hurt spending capacity.

Nov. 3 saw the Dhanteras festival which is the single biggest gold buying day in India, when Hindus believe buying even a bit of precious metal will bring them lasting prosperity.

The festival of lights, Diwali, when people worship the goddess of wealth Lakshmi, fell two days after, also encouraging people to spend on gold.

Some traders said gold's volatility and rise attracted more investors this month in keeping with the rising trend for investment in precious metals in India.

PRICES FIRM

On the Multi Commodity Exchange of India Ltd (MCX) front month gold struck a record high at 20,569 rupees ($449.9) per 10 grams on Nov. 9, up 23 percent since the beginning of the year.

On Monday, front month gold on MCX traded at 20,332 rupees, just 237 rupees off its all-time high, in step with the bullish overseas markets.

Gold has been firm this year with anaemic economic growth in the United States, the Euro zone debt crisis and political tensions between North and South Korea increasing the safe haven appeal of the asset class.

"The price trend is up, so people are worrying. They are saying let's buy and be safe," said Chanda Venkatesh of Capsgold, a wholesaler in Hyderabad in south India.

FULL 2010 IMPORTS SEEN HIGHER

India's gold imports in January to November, taking the November estimates into account, stand at 310.3 tonnes, 3.4 percent up on the year, according to Bombay Bullion Associatin (BBA) data

With this, imports for the full year are expected to be higher from the 339.8 tonnes in 2009, with December promising good wedding sales and higher prices of gold finding greater acceptability, traders said.

India's economic growth is projected at 8.5 percent in the current fiscal year to end March 2011 and traders said gold was a beneficiary because of increased purchasing power.

"Our imports doubled from last year in October and November. We saw good sales as people are getting used to high prices of gold," said a dealer in a large bank that imports gold.

Imports this year would show a jump on account of the low base of 2009 but when compared with 420 tonnes of 2008 and 759 tonnes of 2007, would denote a big fall.

Source : in.reuters.com