India open to buying more gold from IMF

India is open to buying more gold from the International Monetary Fund following its purchase of 200 tonnes earlier this month, the Financial Chronicle newspaper said on Wednesday, helping to drive gold prices to an-all time high.

But India's central bank governor, Duvvuri Subbarao, declined to comment on whether the bank would buy more gold from overseas, however.

The paper said that subject to acceptable conditions, India's central bank could well buy the balance of the initial 403.3 tonnes, or one-eighth of the IMF's total gold holdings, that the Fund had planned to sell.

The report, which helped push the price of gold to a new record above USD 1,178 an ounce, quoted an unnamed government official as saying the additional purchase would depend on successful pitching by the Reserve Bank of India, the country's central bank.

"RBI is an independent body, and the government does not interfere in its affairs. It will get the gold if its bid is successful and at the price it has offered," the official said.

Spot gold has jumped nearly 13% since the beginning of this month as investors flocked to the metal after India's central bank announced it had bought 200 tonnes of bullion from the IMF, in the first such sale by the Fund since 2000.

Russia, Sri Lanka and Mauritius have followed suit.

Although India is the world's biggest consumer of gold, primarily in the form of jewellery and investment among its billion-plus population, its central bank had given little sign of being a front-runner in the move to diversify into bullion.

A second purchase would appear to lift India's share of gold holdings to an estimated 8% or so, much less than most of the developed world but four times China's share.