* India is the world’s biggest bullion consumer
* Its imports in second quarter fell more than 56 percent
* India has increased gold import duty, may lift it more
(Adds quotes, details)
By Siddesh Mayenkar and Charlotte East
HYDERABAD, India/LONDON, Aug 24 (Reuters) – Gold imports
into India are set to fall further this year as global bullion
prices are driven higher by surplus cash in the market and by a
weaker dollar, delegates at a major conference on the metal said
on Friday.
As it is the biggest consumer of bullion, India’s demand has
traditionally been a key determinant of gold prices, although it
has been overtaken in recent years by the weight of Western
investors seeking sanctuary from the global financial crisis.
Speculative and investment demand has led prices to more
than double since 2008, curbing purchases from price-sensitive
Indian buyers. India’s gold imports in the second quarter
plunged more than 56 percent on the year to 131 tonnes,
according to industry body the World Gold Council.
“For the gold price (rally) to continue, someone else would
have to step in to replace India,” said one London-based bullion
banker attending the International Gold Convention in the Indian
city of Hyderabad.
“Investors in America or in Europe might step in and make up
the difference, but it (India’s falling consumption) is
something that will have a negative impact on the gold price.”
Continued…
