India importing 'huge' quantities of gold

Reports are claiming a huge increase in Indian imports of gold for the first half of this year, with figures identifying a total quantity as high as 664 tons for 2007.

Reported to have come from officials at the World Gold Council (WGC), the increase cited would mean a rise of more than 85 per cent on figures for gold imports in 2006.

With autumnal festivals bringing a huge demand for gold necklaces and brooches in what has become the world's leading market for gold jewelry, Indian imports have grown at rapid rates.

In doing so, the Indian appetite for gold has fuelled the remarkable rise of the gold price in recent months, adding to demand created by market worries and a weakening dollar.

Meanwhile gold site Metal Markets reported a planned shift in Indian gold policy to allow further exploration of its own national mining potential.

The site claimed that India in fact holds nine per cent of the world's gold reserves, making the continued decision to buy gold from abroad in great quantity a tribute to the strength of a jewelry demand that exceeds local production.

Although many key festivals have been and gone, the onset of the traditional Indian wedding season, October to January, has reassured many analysts that gold jewelry demand in the country will not let up.