India's gold imports in August jumped 45 percent from a year ago to about 100 tonnes, the first annual rise this year, as lower prices revived demand in the world's leading consumer, a trade body chief said on Tuesday. International gold prices tumbled to below $800 an ounce in August, after hitting a four-month high of $987.75 in mid-July and a record $1,030 in March.
On Tuesday, gold stood at $814.45. "The rise in demand is mainly because of the fall in gold prices," the president of the Bombay Bullion Association, Suresh Hundia, told Reuters over the telephone. India imported about 69 million tonnes of gold in August 2007. In July this year, it bought just 22 tonnes, Hundia said, against 64 tonnes in the same month a year ago.
Local demand for the precious metal picked up after domestic prices fell, tracking international rates, from a record above 13,800 rupees ($312) per 10 grams in mid-July. The lower prices came at just the right time for Indians wanting to buy ahead of a string of religious festivals, when gold buying is considered auspicious. As a result of the increasing demand the premium over international rates more than doubled from a month earlier.
Hundia added that local gold prices were likely to remain at the current level of about 12,000 rupees per 10 grams. A leading trader said demand remained strong but was levelling off. "The premiums have halved to $2.5 per kilogram from $5 in mid-August. The demand is still there, but it seems to be stabilising," said Girish Choksi, an Ahmedabad-based dealer.
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