India's gold sales during the forthcoming period of peak festival demand are expected to rise by 10-15 percent from a year ago due to the bullish trend in the metal, a World Gold Council official said on Monday.
"With international crude prices scaling up to such a high, there is a possibility of inflationary situation developing all around," said Shivram Kumar, vice president of World Gold Council, was quoted as saying in a statement.
"In such a scenario, gold could be the best bet as a hedge against inflation," he added." India's gold imports between January and August were up 86.5 percent from a year ago. The country's gold consumption between October to December 2006 was at 207.7 tonnes, according to the World Gold Council.
Spot gold prices on Monday were quoting at $804.75 a troy ounce, slightly down from $807.70/808.50 on Friday - the highest since January 1980. Indians consider it auspicious to buy gold during Diwali, the festival of lights, which this year falls on November 9. It is also bought for other festivals like Durga Puja and Ganesh Chaturthi, which are celebrated ahead of Diwali.
The period from October to February also marks the main marriage season, when parents gift their daughters gold jewellery, traditionally both an investment and decoration for special occassions.