New Delhi: The consumer demand for gold in the price sensitive Indian market has surged by six percent to 773.6 tonnes in 2007, compared to the previous calendar year, a World Gold Council report said.
Demand for gold as investment increased to 215.4 tonnes, up by 10% from 2006. While jewellery demand rose marginally by six percent to 558.2 tonnes last year, it said.
The combination of a robust economy and buoyant stock market helped to fuel purchases of the metal during the first 8-9 months of the year, despite the gold price exceeding the psychologically significant level of Rs9,000 per 10 grams in September 2007, WGC said.
According to the report, the gold demand in India, the world’s largest consumer of jewellery, declined sharply by 64% to 83.9 tonnes during fourth quarter as compared to 230.1 tonnes during the same period previous year due to volatile price movement.
Gold prices during quarter also touched a record high of over Rs10,000 per 10 gram.
“The Q4 demand was the lowest fourth quarter in tonnage terms since the early 1990s, a point that serves to emphasise the importance of gold price stability to the Indian consumer,” WGC report noted.
It said the investment purchases of gold appear to have been more resilient to the price changes during the last quarter. However, the investment demand continues to be encouraged by the rising price of gold, which generated returns of around 16% in rupee terms last year.
“Indeed, 2007 annual investment demand in India was the highest on record having more than doubled since 2004.” it added.