2009 Hindu festivals to boost gold buying in India

Gold imports in India are seen low, that is a fact now. But recent estimates have also been a little too optimistic predicting Indias gold imports to be somewhere between 460 to 550 tonnes compared to 712 tonnes a year ago.

All this optimism relies solely on the fact that two major Hindu festivals which are also major gold buying festivals will induce buying in the Indian market. With prices not expected to cool in the near future, the choice is now to just watch whether auspicious reasons are strong enough to induce the Indian consumer to buy gold at the prevailing price.

India's Hutti Gold Mines Co Ltd, owned by Karnataka state government, expects its gold production to touch 3.5 tonnes in three to five years from now, from the current 2.8 tonnes, one official from the mines said.

Global Markets
Governments have cut interest rates and boosted spending to fight the worst recession since World War II, spurring investors to buy bullion as a hedge against potential inflation and debasement of currencies. The Dollar Index has lost 4.1 percent this year. Gold typically moves inversely to the U.S. currency.

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