MUMBAI (Commodity Online): Gold consumption in India, the largest yellow metal consumer in the world, is steadily going up. Despite high prices, gold imports by India is steadily going up in 2010.

According to the Bombay Bullion Association (BBA) figures on Wednesday, India's gold imports rose to 27.7 tonnes in March, compared to the paltry 4.8 tonnes of that the country had imported in March 2009. The apex trade body said gold demand in India is going up, despite rising stock and commodity market volumes.

BBA officials said a cooling down in gold prices is one main reason for people to buy more gold in March. There is increased demand for gold investment in India, the largest importer of the yellow metal in the world.

Till two years ago, India's gold imports used to be around 500-700 tonnes. But in 2008 and 2009, gold imports plunged in the wake of scorching gold prices that led to declining consumption of the yellow metal in India.

In 2008, while India imported 420 tonnes of gold, it was around 339 tonnes in 2009. BBA estimates that gold imports by India may cross 420 tonnes in 2010, if the current trend continues.

BBA said Indians are increasing piling their money into gold and exchange traded funds based on the yellow metal in the wake of declining dollar value and rising demand for investments in gold.

Global market analysts said the gold will gain next year. Goldman Sachs said it still expects to see gold at record highs next year.

However, the bank reduced its 2011 gold price forecast to $1,350 an ounce from the $1,425 it forecast in December. That is still well above gold's current record high of $1,226.10 an ounce.

The bank said it still expects gold prices to trend higher this year as the precious metal benefits from the overall low interest rate environment, which lifts the appeal of non-interest bearing assets like bullion.

The bank said it expects gold prices to rise to $1,155 an ounce, $1,220 an ounce and $1,320 an ounce on a 3, 6 and 12-month horizon.