Gold imports by India may climb on investment demand.

By Madelene Pearson
January 05, 2011 (Bloomberg) — Gold imports by India, the biggest consumer, may climb this year as record prices fail to deter buyers and investors seek a hedge against inflation, according to broker Nirmal Bang Commodities Pvt.


Imports may total 770 tons to 810 metric tons, up from 700 tons to 720 tons in 2010, said Kunal Shah, head of commodities research at the brokerage.
Gold climbed to a record $1,431.25 an ounce on Dec. 7 and rallied 30 percent last year for a 10th straight annual gain as investors bought the precious metal as a protector of wealth. Demand in India surged 79 percent in the nine months ended Sept. 30…
“Demand is very good, even at higher prices,” Anjani Sinha, chief executive officer of the National Spot Exchange Ltd., India’s biggest bourse for trading physical gold, said in an interview in Mumbai. “People still believe prices may go up further. The scenario in 2011 will be as good as in 2010.”


… India’s inflation rate remains at “elevated levels,” the Reserve Bank of India said last week. Higher global commodity prices and domestic demand continue to put pressure on prices, the central bank said in a Dec. 30 report.


“Inflationary concerns and strong investment demand is likely to drive gold prices higher,” Nirmal Bang’s Shah said in a phone interview. Global prices will touch $1,470 an ounce in the first quarter, he said. “A lot of people are keen to invest in gold, even at these levels. Demand remains robust.”


… Gold may rise to $1,500 to $1,600 in the year ahead, New Delhi-based broker Religare Commodities Ltd. said in a Jan. 3 report. “The outlook for gold remains bullish, as it continues to provide a hedge against the persistent quantitative easing and weakness in Fiat currencies,” Religare said in the report.
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