India's demand for gold in 2007 is likely to jump by 50 percent, from 2006, to record levels as lower prices lift buying interest, a senior official of the World Gold Council said on Thursday.
If realised, Indian gold demand would exceed 1,000 tonnes for the first time. "The early indications are for a very, very strong year for India's gold demand," Philip Olden, managing director and chief marketing officer of World Gold Council, told Reuters.
"If the price stays stable, then you are probably looking at demand which is at least 50 percent higher than last year," Olden said in an interview during a visit to India. The World Gold Council is funded by the world's leading gold companies with the aim of promoting demand for the metal.
But if prices rise, volumes may fall - though in value terms, gold demand may still jump by 50 percent, he added. In 2006, India's demand for gold was 715.5 tonnes. Latest figures from the WGC show India's gold demand in the first half of 2007 was 528.2 tonnes including jewellery and net retail investment demand."The import numbers in July are also very strong," Olden said.
The Indian gold price for .999 purity was at 8,920 rupees ($216.50) per 10 grams in Mumbai, down from 9,330 rupees on August 30 last year. In May last year, prices hit an all-time high of 10,715 rupees. Olden said that rising demand was driven by India's rapid economic growth as well as marketing initiatives. However, growth could not be taken for granted, said the official who represents 23 global gold mining companies.
Moreover, per capita spending on gold in India was very low, which was an opportunity for growth, he added. India's per capita gold consumption is 17 grams, half that of the United States and one third of the Middle East, WGC officials said.