Indians go on gold-buying blitz: industry body

(AFP PHOTO/RAVEENDRAN)

Indians spent nearly 2.0 billion dollars buying gold last week during Hindu festivities, an increase compared with 2008 despite record prices, the World Gold Council said on Friday.

The World Gold Council (WGC) said gold sales rose 5.7 percent to 56 tonnes from a year earlier in the week of October 12-19, which is considered the most auspicious period to buy gold according to Indian tradition.

Gold prices in India had hit a record high of over 16,000 rupees per ten grams (about 1,080 dollars an ounce), but have since fallen slightly.

India is the world's biggest consumer of gold, importing between 700 and 800 tonnes of the metal every year or 20 percent of global demand.

"The festive season was very positive. This increased demand can be attributed to consumers' belief that gold is the only safe investment in the current global scenario," said Ajay Mitra, the WGC's managing director in India.

"The current trend will continue for the rest of the year," he said in a press statement.

Gold is of cultural and religious significance for Indians, considered an auspicious metal and a visible sign of wealth and prosperity.

In value terms, Indians bought gold worth 89 billion rupees (1.93 billion dollars) in the Diwali week last week, WGC data showed.

The World Gold Council, involved in boosting demand for gold, is funded by the world's top gold mining companies.