Notwithstanding the skyrocketing prices, gold imports are likely to cross the 1,000-tonne mark this year on robust investment demand, according to analysts.

Since the US sovereign debt downgrade and the new threats emanating from Eurozone economies, the yellow metal has been on fire, rallying a whopping 14 percent in this month alone as investors shunned stocks and flocked to gold as a safe haven. The last time gold rose over 14 percent in a month was in 1999.

In the domestic market, gold scaled a new high of over Rs 28,150 for 10 gm in futures market, while in global markets it struck a record $1,877 an ounce last Friday. In the domestic market, on a single day, gold rose as much as Rs 1,310 - the highest ever single day gain, they said.

“With rising prices, investment demand is likely to grow, especially in the gold ETFs (exchange traded funds) and coins, in expectation of better returns,” brokerage firm Maya Iron Ores vice-chairman Mr Praveen Kumar told PTI here.

The country’s total gold ETFs investment has reached 15 tonne which is expected to double in a year, Mr Kumar said. However, the jewellery demand is likely to decline due to rise in recycled gold in the market, he said.

India, the largest consumer of the yellow metal, had imported a hefty 958 tonne in 2010, according to the World Gold Council (WGC) data. During the first six months of this year, the import has already crossed 553 tonne, WGC said.

“The jewellery demand may decline as people will try and sell to take advantage of high prices. This will give rise to recycled jewellery which will make jewellers reduce their stocks,” Mr Kumar added.

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