BANGALORE: India's gold rush is getting stronger. The cumulative demand for the yellow metal in the country is estimated to increase to over 1,200 tonnes or approximately Rs 2.5 trillion by 2020 at the current price levels, according to a report titled 'India: Heart of Gold' released by the World Gold Council (WGC) on Thursday.
India's appetite for gold has increased by 25% despite the rupee rising 400% in the last decade, the report said.
"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," said Ajay Mitra managing director for WGC India.
India accounts for 32% of the global jewellery and investment demand in 2010 at 963 tonnes. "Demand for gold will be driven by savings and growing income levels," said Ian Tefler, chairman of WGC.
At over 18,000 tonnes, Indian households are the largest stockists of gold globally. The report says that two-thirds of the gold demand is driven by a vast majority of people living in villages.
The per capita gold jewellery demand rose from 0.31 grams in 1992 to 0.61 grams in 2010, although this level is below the peak levels of 0.65 grams recorded in 1998. Kerala, Maharashtra, Gujarat and Uttar Pradesh have seen a major demand for gold. The southern states account for 40% of the country's gold demand.
"We predict the new demand for gold will be driven by rapid GDP growth, urbanization and emergence of strong middle class and rising savings rate at 30-40% of income levels," said Mahesh Vyas, MD of the research agency Centre for Monitoring Indian Economy.
via : http://timesofindia.indiatimes.com/business/india-business/The-gold-rush-demand-for-yellow-metal-rose-by-25/articleshow/7840869.cms