India Q4 2011 gold imports slump 44%: WGC

By Rajendra Jadhav

MUMBAI (Reuters) - India's gold imports slumped 44 percent in the last quarter of 2011 as record-high local prices depressed buying interest and shipments are likely to remain at similar levels this year, the World Gold Council (WGC) said on Thursday.

Gold shipments to India fell to 157 tonnes in the last three months last year, lagging behind China's demand in the same period, according to the industry group.

But India's overall gold imports were still up 1.1 percent on the year to 969 tonnes, helping it maintain its spot as the world's top gold consumer for the year.

Jewellery demand also fell 44 percent to 103 tonnes in the last quarter, while investment demand tumbled 38 percent to 70 tonnes.

India's gold imports are likely to be remain flat this year, said Ajay Mitra, managing director of India and the Middle East at the World Gold Council.

"Gold demand in 2012 is likely to remain steady. There are many things that influence demand. Right now, I don't see a big change in demand," he told reporters, adding that factors including the fluctuation in the rupee, overseas gold prices and government policy will influence India's gold demand.

Mitra said that many small and medium companies, with surplus cash in their balance sheet, were investing in exchange-traded gold funds, which would continue in 2012.

A smaller number of auspicious days for weddings in 2012 will temper gold jewellery demand to some degree, he added.

The WGC expects China to overtake India as the world's largest gold consumer in 2012, but said that India will remain a key player in the global gold market.

"India' importance in the gold market will not diminish, even if demand growth softens," it said in the research report.

(Writing by Rujun Shen in SINGAPORE; Editing by Sugita Katyal)