Gold demand in India has benefited from a combination of the country’s strong economic growth and its high rate of inflation.
Indian investors are raising their allocation to gold. Reports suggest gold medallion and bar sales were strong during 2010 in India, and in particular in the fourth quarter, relative to the same period of the previous year, up 30 per cent annually, to 250 tonnes. Consequently, the Reserve Bank of India has authorised seven more banks to import bullion. The World Gold Council (WGC) expects the impact of this measure to be visible during 2011.