India’s monthly gold imports are set to rise by as much 50 percent from current levels while premiums could almost double as the country gears up for a surge in demand ahead of the year-end festivities and wedding season, industry sources said.
More purchases by the world’s No.2 gold consumer after China could help support global bullion prices, which are mired near an 8-1/2-month low of USD 1,216.01 per ounce amid fears a faster hike in U.S. interest rates would dent its appeal as a hedge against inflation.
“Gold imports are expected to rise to about 70-75 tonnes per month in the coming months as against a monthly average of 50-60 tonnes,” said Prithviraj Kothari, vice-president of the India Bullion & Jewellers’ Association.
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Indians traditionally believe that buying and giving gold on holy days brings good fortune, a sentiment that drives up demand ahead of festivals, and this year there is the added lure of weak prices, traders said.
Gold futures in the country are trading at 26,734 rupees (USD 437.58) per 10 grams, down over 10 percent on the year.
via Money Control