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Indian gold buyers turn investment savvy


File photo shows gold jewelry on display at a store in Kolkata. REUTERS/Jayanta Shaw

Indian gold buyers turn investment savvy
Thu Feb 23, 2006 5:58 PM IST

MUMBAI (Reuters) - Global talk of gold as a good investment bet has encouraged greater numbers of Indians to buy the yellow metal, a senior World Gold Council official said on Thursday.

"There has been a growing awareness of gold as an investment tool in the past year," said Navin Kumar, head of financial initiatives at World Gold Council in Mumbai.

"A new segment of small- and medium-sized investors has emerged as a result."

India imported 724 tonnes of gold for jewellery and investment last year, up 17 percent from 2004, Kumar said. Of the total imports, 589 tonnes were converted into jewellery and 135 tonnes were used for investment.

While gold jewellery sales in 2005 showed an increase of 14 percent over the previous year, gold for investment showed a sharper 35 percent rise compared to the year before, data showed.

Kumar said the jewellery sector would have grown more if not for price volatility seen in the second half of the year.

"The jewellery market is much more price sensitive," Kumar said. "People tend to postpone their purchases when prices are too high."

"If there are changes in policy that encourage investment in gold, this segment would grow a lot more," he said.


LINK: http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-02-23T175015Z_0...