significant assays received from coyote, page-12

India to Consume 900 Tonnes of Gold

By Commodity Online
28 Aug 2007 at 09:56 AM GMT-04:00


MUMBAI (CommodityOnline.com) -- India is witnessing the highest ever demand for gold this year. The strong rise of the rupee and rising consumer spending have raised India’s gold demand by as much as 72% in the first half of the year.

A report from the World Gold Council says demand for gold in India reached an all-time high of 317 tonnes in the second quarter of 2007. The figure is nearly double of what was sold last year and equal to half the global mined output for the same period.




The report said that of this, only 10%-15% was recycled gold, indicating strong demand for fresh imports.

Traders predict that if the current demand continues, the full-year consumption of in India could rise by as much as 30% on year to 900 tonnes.

Gold demand typically peaks in the country during the second half amid festivals and the wedding seasons. Report said people in rural and urban areas have started stocking up the yellow metal for the festivals such as Diwali and Dusshera.

According to Suresh Hundia, president of Bombay Bullion Association, traders expect record sales of gold this year. “Many traders and jewellers are working overtime to meet the ever-growing demand for gold,” he said.

Gold Price Will Boom, Thanks to Unsteady Markets

Experts have predicted that the global price of gold will be $700-$730 an ounce by the end of this year.

Participating in a gold convention organized by Foretell Business Solutions in Mumbai, metal analysts said consumers and investors are buying gold these days to protect themselves from weakening returns in other asset classes.

“I think gold price will be above $700 by this year-end,” Tom Pawlicki, precious metal analyst with Man Financial Global told the conference participants.

He pointed out that gold is being used as a hedge against geo-political risks thanks to the liquidity troubles in credit and equity markets across the world.

But he added that the gold prices would then come down after reaching the $700 level next year.

Paul Walker, the chief executive officer of GFMS agreed with the analysis by pointing out that gold will witness a sustained rally in the coming months.

“Thanks to the market turmoil, part of the money from equities and other assets will come into the gold market,” Walker said.

Rajan Venkatesh, director of India bullion of the Bank of Nova Scotia also expressed the same sentiments: “We are bullish on gold. The gold market is going to glitter.”