Indian bank ready to launch new ETF

Gold investment could be made more accessible to many in the world's biggest consumer for the precious metal, as a new Indian exchange-traded fund looks on the cards.

India's biggest lender, the State Bank of India, has announced plans to launch a gold ETF in 2008, betting on the strength of the booming domestic economy and on the resurgent demand to buy gold.

The prospects for a new ETF in India are high, with the existing funds only in their infancy but already holding a collective total of more than three tons of gold.

This comes amid a sterling period for ETFs, with the World Gold Council (WGC) claiming that a booming third quarter of 2007 brought the global ETF total to 138 tons – topping the expectations of many.

Indian takers of gold ETFs have increased significantly in the period, with more and more investors look to buy gold, but without taking physical delivery of bullion.

The Indian State Bank claimed that India's current economic upsurge could see gold consumption boosted by five per cent a year, a prospect making its planned gold ETF a hotly anticipated one.