Tuesday, 6th April 2004 (2685 views)

India is expected to increase gold imports in the coming weeks, as the rupee continues strongly and world gold prices dip.

Traders have revealed that demand in the peak buying season is up and likely to rise with the start of the summer crop harvests, after farmers reported the best monsoon rains in a decade.

India is the world's largest gold importing and consuming and April and May are the busiest months for weddings. Gold jewellery forms an integral part of Hindu marriages where it is given as gifts for financial security.

"The marriage season buying will definitely be strong as Indian prices have fallen due to a rise in the value of the rupee against the dollar," Nayan Pansare, a senior jewellery firm official told Reuters news agency.

Daily gold imports into Bombay, which accounts for a quarter of Indian demand, rose to 500 kg this week, up from around 200 kg the previous week, after the rupee surged by nearly 3.5 percent against the dollar.

India imports an average 1.6 tonnes a day to meet 70 per cent of its annual gold needs of more than 800 tonnes. The country has an estimated 300,000 gold jewellery outlets and around three million goldsmiths and ancillary workers. Jewellery accounts for 85 per cent of Indian gold demand.

 

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