MUMBAI (Thomson Financial) - India spot gold prices continued firm for the fourth consecutive session and closed at another record high even though domestic demand remained weak, trade participants said.

In London, gold traded near its all-time high of 989.55 usd an ounce amid still-strong demand from speculators and investors worried about global inflation risk and a weak dollar.

India imported around 10.2 tonnes of gold in February compared with 52 tonnes in the same month a year earlier, said Suresh Hundia, president of the Bombay Bullion Association.

Physical buyers are not comfortable buying the yellow metal at such record high prices, Hundia added.

India, the world's largest importer of gold, bought 722 tonnes of gold in calendar 2006.

Hundia also noted that the country did not import a single tonne of silver during the period Oct 2007 to Feb 2008 compared with 380 tonnes in the year-ago period.

The World Gold Council recently said the country's jewellery demand for the fourth quarter slumped to 54 tonnes compared with 165.4 tonnes a year earlier, as prices were volatile and reached record highs of over 10,000 rupees per 10 grams.

Walter de Wet, head of commodities research at Standard Bank, told Thomson Financial News: "We have seen jewellery demand taking a beating in India and the world over due to record high prices, we have also witnessed huge scrap supplies coming to market from the eastern part of the world from countries like Vietnam, Hong Kong, China and India."

Gold is expected to hit 1,000 usd an ounce within the next three months as risk averse investors turn to the precious metals complex as other asset classes perform badly, he added.

Mumbai gold of 0.995 purity closed 60 rupees higher at 12,805 rupees per 10 grams, while gold of 0.999 purity closed 55 rupees higher at 12,855 rupees per 10 grams.

Silver of 0.999-purity closed 80 rupees higher at 24,650 rupees per kg. Siddesh Mayenkar; tfn.newsdesk@thomson.com sim/ran/am

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