India's gold sales during 31October and 6 November, when the country celebrates Dhanteras and Diwali festivals, are expected to surge to 40 per cent on the 56 tonnes of last year, which would support the outlook for record imports in 2010, accord to a senior World Gold Council (WGC) official. Dhanteras falls on 3 November when jewellers in India are known to record the annual highest gold sales with Diwali to be celebrated on 5 November, when Indian consumers buy the yellow metal for future prosperity. According to a report in The Times of India, Ajay Mitra, managing director of World Gold Council India and the Middle East told Reuters in an interview, that it was now an economical decision and the urge among consumers was to buy gold now than later as prices had continuously rallies upwards. According to WGC projections the demand this year in north India, for the yellow metal would be better than the western region. The north consumed 16.8 tonnes of gold last year for Dhanteras while western India accounted for 19.6 tonnes of the precious metal last year of the total 56 tonnes. According to the report, Mitra said the clinching argument as signaled by the Reserve Bank of India's (RBI)'s purchase of gold as, there was nervousness and uncertainty in terms of other assets' performance and how the currency markets would be shaping up. The RBI bought 200 tonnes of gold from the IMF for $6.7 billion at an average price of about $1,045 an ounce at the end of 2009, in an off-market transaction. The transaction saw the central bank's gold holdings the record the 11th largest among its peers. Meanwhile, gold on the Multi Commodity Exchange (MCX) was trading at Rs19,446 per 10 grams yesterday, up 22 per cent on last year. Mitra as quoted by ET report added that so far demand had been consistently strong, even the period of Shradh did not take away sheen off gold said Mitra, referring to the period, when Indians pay homage to ancestors and refrain from auspicious purchases or activities. Mitra expects imports would break the 2007 record of 770 tonnes and rise to as much as 800 tonnes in 2010. He said the buying momentum was also expected to continue till 2011. Meanwhile, The World Gold Council, an association of gold miners like Barrick Gold Corp , the biggest gold miner in the world, and AngloGold Ashanti among others, says Indian imports would exceed 200 tonnes in the last quarter of the calendar year. India imports of the precious metal stood at 539 tonnes in 2009. Mitra said investors and consumers now wanted security against inflation, protection of wealth and also returns gold was therefore the best available option. He added that there had been a dearth of options for investment with good consistent returns. Gold falls in the regulated sectors in India with the union government allowing 23 state-run and private banks to trade in bullion at the wholesale and retail levels. According to Mitra, investments in gold exchange traded funds (ETF), currently at about 13 tonnes, is set to rise by double digits in the near-term. Meanwhile according to figures with the WGC, the global jewellery demand which totalled 408.7 tonnes during the second quarter, declined 5 per cent from year-earlier levels. This comes as the smallest decline in the rolling four-quarter performance since the first quarter of 2008, signaling a deceleration in the pace of decline in global jewellery demand. However, expressed in $ value terms, jewellery demand aggregated $15.7 billion which was, 23 per cent higher than the $12.8 billion level in Q2 2009. Jewellery off-take was lower across most markets, with only a few countries bucking the trend to report an increase over Q2 2009. However, the picture is different when seen in consideration of global jewellery demand in value terms, with a few markets experiencing a decline in the $ value of gold jewellery off-take. At the country level, the Southeast Asian markets of Thailand, Indonesia and South Korea experienced worst falls in Q2 gold jewellery demand due to high price levels.

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