Indian Gold Imports Expected To Increase In 2011

Indian gold imports were 918 tonnes for all of 2010 according to the World Gold Council. Already in January, imports are 15 tonnes above what they were in January of last year. So, Indian gold imports are already on track to beat 2010's number.

Gold demand is likely to rise as the country's economy is expected to grow at 8.6 percent this year. Besides, a rebound in farm growth would enhance purchasing capacity of farmers, he added.

"The demand achieved in 2010 will carry forward into this year. If January month's gold demand trends are any indication, it looks like it would be a new record," said the WGC, an association of the world's leading gold producers.

The country's gold demand was a record 963.1 tonnes in 2010, up by 66 per cent from 578.5 tonnes in the previous year, it said in a statement.

According to the WGC, gold prices are expected to be rise in the current year considering strong demand and sluggish global supplies....

Already, last year's warning about gold demand fading due to then-record-high prices look quaint. High economic growth in India has a lot to do with expanding demand, of course, but so does high inflation there. The same confluence is working in mainland China, where the governmment officially encourages its subjects to buy gold.