India may consume 1000 mt of gold in 2011

Columns  |  2011-05-01 02:59:17   |   By

India consumed 963 tons of gold in 2010 and wedding season increases India's appetite for the yellow metal. Akshaya Tritiya on May 6 is considered auspicious for buying the precious metal

By Sahit Muja
India is the top user of gold in the world . Gold consumption in India rose to 963 tons in 2010.Albanian Minerals predicts that Indian consumption of gold may climb to 1000 metric tons in 2011.

Gold has traditionally been the most popular precious metal investment in India, where brides are often weighed down by their jewelery in a display of wealth and economic status.

The wedding season in India and festivals increases the country's appetite for gold.

Farmers in remote villages use bullion in the absence of banks for savings. The largest buyers of gold in India are farmers, around 70% of gold and silver is bought in rural areas.

Indian farmers also invest in gold and silver because they don't trust the Indian banks.

Gold and silver prices have gone up between 25%-30% year-on-year for the past few years and added credit to the view that gold is the best investment in India.

India's economy has grown 8.6 percent in the fiscal year that ended in March, while the government expects it to grow at about 9 percent in the current fiscal year

Indian investors buy gold to hedge market losses.

While markets have been uncertain in the last few years, gold has been an ideal investment and has provided consistent returns to Indian investors.

Gold buying in India is set to rise .

The domestic demand is just one of the factors affecting the prices of gold and silver in India.

The gold and silver market is global .

Devaluation of the dollar, economic problems, political tensions, inflation, and exchange rates are other factors that have also contributed to rising gold and silver prices.

(The author is President and CEO, Albanian Minerals,New York) Courtesy: PRLog