IBMA sells 7,000 coins during Indian festive season

HONG KONG, Oct 22 - Some 7,000 gold coins issued by the Indian Bullion Market Association have changed hands during the current festive season, reflecting a growing interest in the investment product, a senior industry officials said on Thursday.

"We believe that figure will cross 100,000 coins per annum in the first year itself," said Anjani Sinha, president of the group which represents about 10,000 jewellers across India. "The price is cheaper compared with imported gold coins."

The IBMA was set up earlier this year and has six approved refineries. The gold coins were sold at between 13,000 and 13,100 rupees per 8 gramme -- about 8 percent cheaper than imported products.

India is the world's largest gold consumer, accounting for 20 percent of global demand for jewellery and investment.

Dealers said gold coins have gained in popularity in India, where locals buy them for investment or as gifts during religious festivals that last from August to October.

Weddings normally take place during the festive season and jewellery is the most common gift during religious events in India and forms an essential part of the dowry basket.

"IBMA coin made by IBMA-approved refineries is a way to develop market linkage with domestic household gold and IBMA has been successful in making it operational in a short span of time," said Sinha, adding that the purity was also guaranteed.

"Compared to jewellery, investment in gold coins is increasing," he added, speaking on the sidelines of a bullion conference in Hong Kong.

The IBMA has mobilised about 10,000 jewellers and traders, through 40 of India's largest bullion associations, to set up a platform that will determine an Indian benchmark price for gold.