India to import 550 tonnes gold in 2010

According to reports, India is likely to import 500-550 tonnes of gold in 2010, up from 480-490 tonnes from a year earlier, and prices of the yellow metal are expected to remain firm.

Gold futgures on the Multi Commodity Exchange struck an all-time high of Rs 19,198 ($411.97) per 10 gm on June 8, when investors sought refuge in the safe haven metal, from the euro zone debt crisis.

The spot exchange also plans to start the spot electronic trade (e-series) in copper and nickel from August, said Sinha, who is also the managing director of National Spot Exchange.

Meanwhile, more and more people are now putting their money on Gold ETFs in India. As a sign of this, India's gold collection under exchange-traded funds rose 76 per cent in June from a year ago to 10.453 tonnes.

There has been an increase of customers by 70-80 per cent (on year). Most of the participation was from high net worth individuals and other retail investors.

Though gold collections under the ETFs are growing on year, they remain miniscule against India's imports of around 700 tonnes annually.

The gold ETFs, instruments that trade like shares and are backed by physical gold holdings, are more than three year old and may get crowded with some other funds planning their entry.

Over the past nine years, gold has managed to post successive increases in its annual average price, navigating the choppiest of waters.