Indians purchase record gold this year

MUMBAI: Gold purchases in India are up to 300 tonnes in the wake of rising jewellery demand thanks to a decline in rupee prices and lower price volatility for gold, global metals consultancy GFMS said. This is more than double of the gold purchases in India last year, it said. India is the world’s largest consumer of the yellow metal. India consumes anywhere between 600 to 700 tonnes of gold annually, worth $6-7 billion. But domestic production of gold is only about 2 tonnes per annum.The consultancy said that the net gold de-hedging in the second half of 2007 will be between 1.5 million and 2.5 million oz globally. Global dehedging stood at 9.5 million oz, led by Newmont and Lihir, GFMS said. It said that there are 34.2 million oz left in forwards, loans and options, with a negative mark-to-market of $8bn, a reduction of $1.8bn in the quarter. "While it would seem highly unlikely that the second quarter's record levels of de-hedging will be surpassed in the second half of the year, it would nevertheless seem reasonable to expect ongoing de-hedging to outpace the delivery schedule," GFNS said in a statement. Already, a number of smaller gold companies have started rolling their plans for de-hedging relatively small amounts of gold. GFNS said that the June quarter's de-hedging activity was linked mainly to merger & acquisition activity as targeted companies' hedge positions were unwound.