Indian gold jewelry demand defies price rise

Retail gold demand in India has continued to soar despite rising prices, according to Indian daily the Economic Times.

The world's biggest market for gold jewelry has seen demand for the precious metal hit the roof during the autumn festival season, confounding the fears of many that higher prices would curb demand.

Rajiv Popley, director of luxury goods provider, the Popley Group, told the Economic Times: "Festive buyers are shopping even as the prices are higher as they expect the prices go up further. Besides it's a good investment option."

The upcoming Dusshera and the imminent vast celebrations for Diwali are likely to raise demand in coming weeks, with gold jewelry a traditional gift and accessory for festival-goers in the country.

According to Bloomberg reports, bullion imports into India will not, however, echo the growth in jewelry demand, with expectations from the World Gold Council slightly down.

Imports have been identified as likely to hit somewhere between 800 tonnes and 900 tonnes this year, up from the Indian figure of 715 tonnes last year, but below initial expectations.