According to the Word Gold Council, demand in India for gold through exchange traded funds is likely to double this year. The Indian gold market is expected to exhibit the greatest growth in the near future.
“The investment demand for gold under exchange traded funds continues to be very very strong. In future, the total tonnes of gold investments made under ETFs (in India) may double,” Ajay Mitr,WGC Managing Director India and Middle Eastern region, said in a report. [Gold ETFs Testing December Low]
In 2007, the gold market in India was about 5 metric tons and rose to 15 tons last year. Total gold demand in India for 2011 was 963 tons, as investors were drawn to the metal because of the low inventory costs, reports Economic Times. Gold jewelers also add to the total gold demand in India, and some are using ETFs to purchase their gold.[Gold ETFs Slip into Negative Territory for the Year]
The overall gold demand at the moment is soft due to a new levy on excise duty, leading to weak consumer sentiment and confidence. Many are expecting this trend to continue throughout the second and third quarters in India, and then shape up again the fourth quarter.[Are Gold ETFs a Safe Haven Again?]