India is likely to face gold shortage in the near future with more people

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buying the yellow metal after global meltdown in Europe, experts said today.

"With the gold being looked as a lucrative investment option in European market, back home, the yellow precious metal will face temporary shortage," Mineral and Metals Trading Corporation (MMTC) Chief General Manager Asheesh Majumdar said.

Europe is unable to supply gold to India because investors there have started investing in gold, he said.

Majumdar was in Goa to announce the second edition of MMTC's gold exhibition, which last year sold almost Rs one crore a day, during the four-day show here.

"The sale of gold shot up by nearly 15 per cent in India. People have learnt that instead of investing in the stock market, which has been volatile, gold offers them steady and assured returns," he added.

Meanwhile, Gitanjali Gems, co-hosts of the exhibition, announced a tie-up with MMTC for setting up jewellery stores across the country, its CEO Shekhar Wadke told reporters.

"We have already signed an MoU with MMTC," he said.

Gitanjali gems accounts for four per cent of the branded jewellery market-share in India, while MMTC corners nearly 25 per cent of the imported bullion market share.

India imports nearly 500 tonnes of gold every year.

MMTC, which earned Rs 35,000 crore turnover in the last financial year, also handles fertilisers, agro-commodities, besides others.