Gold jewellery demand strong in 2011: Gitanjali

Gold jewellery demand in India, the world's biggest market, will likely remain strong in 2011 despite surging prices, the head of Gitanjali Gems, the country's biggest jewellery retailer, said.

"Despite the price increases in the past two years ... there is still hunger for gold (in India) ... Demand in volumes in still very strong," managing director Mehul Choksi told Reuters in an interview on Sunday. Gold jewellery demand rose 12%  to 206 tonnes in India in the first quarter and was a major driver behind a 7% rise in global jewellery demand in the period, according to the World Gold Council. Some analysts have doubted such growth would be sustainable, with gold hitting a fresh record at USD 1,575 an ounce this month. Choksi confirmed his company's target to raise sales to about USD 2 billion this year from USD 1.55 billion in 2010.