The impending festival season may further increase gold demand in the country, as the yellow metal is not only considered auspicious metal but also a safe mode of investment. Currently, nation's gold jewellery market stands at Rs 80,000 crore, and it is expected to reach Rs 125,000 crore by the year 2014.

C. K. Venkatraman, Chief Operating Officer at Tanishq, the gold brand of Tata, said that Indians buy gold during the festival season in September-October and it would not be unexpected for the country, having 300,000 jewellers, to report high demand of gold. Venkatraman added, "It will be better than the current situation. People must be getting fed up of holding back."

The global slowdown adversely hit gold demand causing decline in gold exports for the first eight months of the current financial year, according to the Bombay Bullion Association. Venkatraman said: "The fall in imports could be affecting miners and traders. It need not affect Indian jewellers or manufacturers."

Tanishq had failed to perform well in the US market, but it has significant share in the gold market of India. Jewellery business alone contributed Rs 2,000 crore in the Rs 3,850 crore Titan Industries business during the reporting period.