India keeps on demanding gold

Gold demand keeps on rising in India, with 2007 revealing itself to be a stellar year for gold buying in what is now the world's biggest market for the precious metal.

Even before the August festival of Raksha Bandhan brought its traditional surge in demand for gold jewelery, figures from the World Gold Council (WGC) showed that the first two quarters of the year saw a huge increase on the Indian gold market in 2006.

During the second quarter of 2007 Indian demand for gold rose to 317 tons, a sum equivalent to half of the global output of gold mines for the same period.

Predictions for the rest of the year are accordingly high. The WGC forecasts a level of demand for 2007 50 per cent higher than the 2006 level. This would constitute a yearly demand of over 1,000 tonnes for the first time.

James Burton, chief executive of the WGC said that "the figures from India this quarter are particularly pleasing and we will continue to encourage India's ongoing love affair with gold".