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WGC: Gold on track for good year on back of India demand

Increasing gold imports in India are likely to lead to a good year for the precious metal, according to an official at the World Gold Council (WGC).

Speaking to Reuters, the WGC's India head Ajay Mitra said: "Till May we have had very bullish purchases of gold and we don't see a scale-down from that.

"Prices are stable and given that the economy is doing well, we don't see a southward direction [for demand]."

Data from the council showed that India imported 50 per cent more gold between January and March this year than it did in the same period of 2006.

Mitra maintained that it would be "a good year" for the gold price if current trends continued. He also said that an increased amount of advertising for gold would help to bolster the yellow metal.

"There are many more market activities happening this year," he said.

However, a recent report from Fortis/VM Group, and seen by Mineweb, indicated that the future of gold demand in India could depend to some extent on whether or not the country's rural poor will continue to invest in gold in turbulent times.

This many change when more Indian farmers move to urban areas, the report noted.
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