India's appetite for silver surged in 2011 despite prices of the white metal touching a record level.

The country's imports rose to 4,800 tonnes in 2011 compared with 2,800 tonnes in 2010, Mr Prithviraj Kothari, President, Bombay Bullion Association, said today.

He expects silver imports to top 5,000 tonnes in 2012 driven mainly by investment demand.

Gold prices, according to Mr Kothari, would remain mostly firm at least as long as interest rates remain zero in the US. “Gold should not go down until 2014 as interest rates would remain low in the US,” Mr Kothari, who is also the Managing Director of RiddhiSiddhi Bullions Ltd (RSBL).

The US Federal Reserve had earlier stated that it would keep interest rates in the range of zero to 0.25 per cent until late 2012 on fears of slow growth in its economy.

A weak dollar would help gold prices rise, he said on the sidelines of a press conference to launch MotilalOswal Mutual Fund's gold exchange traded fund. The gold ETF product of MotilalOswal is supported by RSBL.

According to Mr Kothari, international gold prices would trade in a range of $1,500-2,200 an ounce during the current calendar year. At present, gold prices are trading at $1,740.

In India, he expects gold prices to move down to Rs 25,000 for 10 gm at the lower end and rise to Rs 35,000 on the upper side. In Mumbai spot market gold prices were around Rs 28,000 for 10 gm.

He expects gold imports to be around 900 tonnes. In 2011, imports of the yellow metal stood at 966 tonnes, almost at par with 2010 imports of 959 tonnes.

“We should have imports of at least 800-900 tonnes in 2012. Demand for gold would depend on interest rates and monsoon,” Mr Kothari said.

He pointed out that some interest in platinum is picking up. Platinum prices have always been higher than gold but the yellow metal in recent times has paced ahead of platinum in terms of prices.

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