Gold imports may exceed 918 tonne level this year

India's gold imports are seen likely to exceed 918 tonne in the calendar year 2011 on the back of robust demand coupled with high economic growth.

"Gold imports were 918 tonne in 2010. It is too early to estimate exact imports. But there is every reason for us to believe that it is going to be higher than last year as demand is good," World Gold Council Managing Director (India and Middle East) Ajay Mitra told reporters.

Gold demand in India, the world's largest consumer of yellow metal, was close to 100 tonne in January, 2011 as against 85 tonne in a year-ago period, he said, adding this was indicative of the momentum continuing.

Gold demand is likely to rise as the country's economy is expected to grow at 8.6% 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 tonne in 2010, up by 66% from 578.5 tonne 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.

"Prices have been moving upward last couple of years. Analysts are projecting global gold prices to touch $1,500-1,600 per ounce and domestic price at Rs 24,000-25,000 per ten gram by 2011-end," Mitra said.

Currently, gold is available at $1,387 per ounce in the global market and at Rs 21,050 per 10 gram in India.

The WGC said that the Indian government is looking at hiking import duty on gold in the forthcoming budget to Rs 400 per 10 gram from the existing Rs 300 per 10 gram.

Indian government earned around Rs 2,836.6 crore in 2010 from import duty on gold, it said.