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Gold ETF Demand Doubles in India

INDIAN Gold ETF demand doubled last year, with corporations and small businesses increasingly using them as a Gold Investment vehicle, the Economic Times of India reports.

"For the first time, small and medium enterprises (SMEs) have invested [in Gold ETFs] in large numbers,'' it quotes Ajay Mitra, managing director, Middle East and India at the World Gold Council.

"The gold collections of ETFs have risen from 15 tonnes in 2010 to 30 tonnes in 2011. The number of corporate portfolios under ETFs has also increased to 5,599 in 2011 as against 3,310 in 2010."

"The stock market was weak in the second half of 2011," adds Brijesh Mehra, head of corporate and investment banking at Royal Bank of Scotland.

"[This resulted] in a lot of firms putting their faith in ETFs."

Despite the strong Gold ETF demand, however, Indian gold imports fell 44% in the final quarter of last year, as the weak Rupee led to record high domestic Gold Prices. Indian gold imports in 2012 could be set to fall compared to last year, while Indian government advisors are suggesting the government should try to curb demand to Buy Gold.

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