New Delhi, Oct 11 (IANS): India's gold imports declined by 58.96 per cent to 270 tonnes from January to September from 658 tonnes that were shipped-in during the corresponding period of last year, a research report said on Tuesday.

According to the report by the industry body Assocham, gold imports declined due to a prolonged strike by jewellers and continuation of 10 per cent custom duty on imports. 

The report stated that smuggling of gold has been on the rise due to high custom duty, even as the industry demands a lower levy structure to encourage official imports. 

India has been among the two biggest gold consumers in the world with average imports of more than 1,000 tonnes per annum reported in the recent past.

Further, the industry body pointed-out that it expects gold prices to stay firm in the range of Rs 30,500-Rs 33,500 per 10 grams.

The report said that gold prices are expected to remain firm in the backdrop of continuous global political and financial risks coupled with revival in demand in the domestic market. The prices have appreciated by about 25 per cent since January this year.

"The moot question among the buyers and analysts is whether scope for any further run is left when gold has seen so much of a rally, the best among all the assets classes - including quantitative easing led stock markets," the research paper by Assocham said.

"Revival in Indian consumption, financial risks in the Chinese economy, tapering tantrums of the US Federal Reserve as also close American Presidential elections are all seen as the push factors for the gold to remain as a safe haven." 

Currently, gold prices range from Rs 31,000-Rs 31,500 for 24 carat purity in major Indian cities. 

"Going forward, the festive demand will get a further push from the wedding season, which is the main contributor to gold consumption in India," the paper said.

"The upside in the short term of a few months is seen between Rs 1,500-Rs 2,000, while the downside could be limited to Rs 1,000- Rs 2,000 per ten grams." 

D.S. Rawat, Secretary General of Assocham said: "Gold is finding a strong support levels in the international markets and is expected to stay above $1,200 mark, as a starting point for the next possible rally."

"All in all, given the state of play in equity, debt and properties, gold would stand out for quite some time."

Rawat elaborated that negative interest rates by major global central banks have also led the investors to seek refuge in gold.

"The outlook for the precious metal remains upbeat taking into consideration several factors including reduced pace of the US Fed rate hikes, increased adoption of negative interest rates most recently in Japan, increased inflows in gold ETFs (equity trade funds) and decline in gold production," Rawat added.