UBS Gold Sales to India Rise 23% So Far in 2011; Demand ‘Robust’.

UBS AG (UBSN) said its gold sales to India, the biggest bullion consumer, rose 23 percent so far in 2011 from the same period a year earlier, with demand “robust.”

Physical bullion sales in May rose “a very substantial” 76 percent from the previous month and 161 percent from a year ago, UBS analyst Edel Tully said in an e-mailed report dated today.

Gold prices have climbed 8.6 percent this year, and reached a record $1,577.57 an ounce on May 2, extending gains for an 11th straight year. Bullion imports by India surged to a record in 2010, driven by jewelry demand and expectations prices would continue to appreciate, according to the World Gold Council.

“The value of India’s combined gold and silver imports soared 500 percent in May from April, and 222 percent from May 2010,” Tully said in the report. “While import volumes rather than values would be much more accurate, given the run-up in gold and silver prices in May, the figures still provide a good indication of the country’s robust appetite for precious metals.”

Bullion for immediate delivery fell 0.3 percent to $1,541.75 an ounce at 4:28 p.m. in Mumbai. Futures for August delivery were down 0.2 percent to $1,542.70 an ounce.

Source : bloomberg.com