in one month the country will have imported about half its average quota for the year!

"Consumers are shying away from stocks and bonds and heading to safe assets like gold and real estate, but one cannot understand this given the meagre 12% growth in imports of petroleum and oil products.

Analysts maintained that India's central bank, the Reserve Bank of India's decision to grant licenses to seven more banks to import bullion has helped push up demand. Karur Vysya Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, Punjab and Sind Bank, South Indian Bank, State Bank of Mysore and State Bank of Travancore were added to the list. As of the start of 2011, some 30 banks in India have been granted permission to import gold and silver.

Add ongoing Chinese demand for PMs, and one can see why calls for an imminent gold crash absent a global deflationary vortex are largely overblown.
http://www.zerohedge.com/article/indian ... ng-500-may

MUMBAI | Wed Jun 22, 2011 3:08pm IST

MUMBAI (Reuters) - India gold futures were steady on Wednesday afternoon following overseas markets, where investors awaited the outcome of the Federal Reserve panel's meeting for direction, analysts said.

* Dealers said physical buyers were unwilling to place new deals as they sought price direction.

* The most-active gold for August delivery on the Multi Commodity Exchange (MCX) was trading 0.12 percent higher at 22,686 rupees per 10 grams at 2:18 p.m.

* The Fed's two-day meeting ends on Wednesday, when markets hope to learn more about policy to deal with an economy that shows signs of slowing, although Chairman Ben Bernanke probably will continue to argue the slowdown is temporary.

* Investors were also waiting for movement in the rupee for direction. The local currency plays an important role in determining the landed cost of the dollar-quoted yellow metal.

* India, the world's biggest buyer of yellow metal, is in a seasonally lean demand period due to monsoon as farmers divert their savings on agricultural equipment and fertiliser for summer-sown or kharif crops.(Reporting by Siddesh Mayenkar; Editing by Sunil Nair)
Source : REUTERS India