5.2 mt yellow metal sold in 3 days

Reinforcing the country's enormous appetite for gold , nearly 5.2 million tonne of the yellow metal was sold to traders across the western region within three days of its arrival in Ahmedabad.

Scotia Bank and a few other banks imported the gold. Another 4 million tonne of silver was imported by the State Trading Corporation for local dealers over the past 10 days from Singapore.

In fact, this is the largest consignment brought into the city by Nova along with ICICI, UTI, Kotak Mahindra and a few others in the last couple of years, sources said.

The gold consignment, valued around Rs 400 crore, landed on October 3, while the silver consignment, valued around Rs 8 crore landed on October 6.

Samir Mankad, managing director, Gujarat State Export Corporation, said demand for the precious metal has surged in Gujarat, Rajasthan and Madhya Pradesh over the last couple of months.

Also with the festival season kicking off, demand for gold and silver has increased the gap between demand and supply according to Biren Vakil of Paradigm Commodities.

After a fortnight of slide to briefly touch $574 per troy ounce, bullion prices have scaled up again to $593.50 per troy ounce. Bullion prices on the Mumbai market today ended at Rs 8605 per 10 gm against its earlier close of Rs 8635.

Vakil says an average demand for gold in Gujarat remains around 1.5 to 2 tonne a day during the festive season, while for silver demand hovers around 10 to 12 tonne a day during the peak demand period of festivity and marriage seasons.

Mankad of GSEC suggests that a sudden jump in demand could also be a possible shift in investment pattern where gold offers better security compared to a relatively volatile equity or commodity market.

A recently released World Gold Council report suggests that last year India accounted for no less than 22 per cent of global gold jewellery demand and 35 per cent of all net retail investment through gold coins and bars.

It is estimated that around 15,000 tons of gold, or 10 per cent of the world's entire above ground gold stocks, are situated in India.

Gold sales in India have averaged 676 tons a year over the past decade, more than one and a half times as much as sales in the US over that period and between three and eight times more than sales in China, Saudi Arabia the United Arab Emirates, the world's other large gold consuming countries.

In a report entitled "The Role of Gold in India", the council's investment research manager, Natalie Dempster, concludes that India's dynamic population and economic growth and religious and cultural affinity to gold will continue to underpin gold demand for many years to come.

"Rapid income growth, thanks to the influx of foreign capital, should in tandem with new successful marketing campaigns, boost discretionary spending on gold notwithstanding temporary fluctuations associated with spikes in price volatility," Dempster says in her report.