India's gold demand to grow to 1,200 tons by 2020: WGC

Gold demand in India will continue to grow and is likely to reach 1,200 tonnes or approximately Rs 2.5 trillion by 2020, at current price levels, according to a research by World Gold Council (WGC).

"The rise of India as an economic power will continue to have gold at its heart. India already occupies a unique position in the world gold market, and as private wealth in India surges over the next ten years, so will Indian demand for gold," WGC Managing Director, India and the Middle East, Ajay Mitra said in a statement here.

Indian gold demand has grown 25% despite 400% price rise of the rupee in the last decade, it said adding that this research reaffirms the country as a key driver of global gold demand and expects increase by over 30% in real terms, it said.

''India: Heart of Gold'' is the second in a series of WGC research with focus on India, which includes forecasts from the Centre for Monitoring the Indian Economy (CMIE).

Mitra said: "Furthermore, gold will remain auspicious given its connection with tradition, whether religious or attitudinal, will remain powerful."

He pointed out that Indians tend to be risk averse and place great faith in the wealth preservation qualities of gold, which inspires confidence, stability and security.

"Therefore, the view that Indian demand for gold will be driven by the concept of enduring value, not price," he said.