The country's gold imports in the second half of the current calendar year are likely to touch 280-300 tonnes, provided price of this precious metal ranges between $635 and $670 an ounce, a comfort level for Indian consumers, said Paul Walker, CEO, GFMS.

He was talking on the sidelines of the India International Gold Convention 2007 in Mumbai on Friday.

But, as the price is estimated to go up to $700 an ounce towards the year-end, imports may dip below 200 tonnes, he cautioned. "Indian consumers are highly price sensitive. Any price rise in the past has affected gold jewellery buying in India badly."

Elaborating, Walker said actual imports in the country are estimated at 140 tonnes in the third and fourth quarters. The country's demand in the first half stood at 528.2 tonnes excluding replenishment compared with 307.1 tonnes in the same period last year. The jewellery demand in the first half was recorded at 387 tonnes while the net retail investment demand was pegged at 141.2 tonnes. Gold replenishment from India is estimated at 8-10 tonnes a month.

Thus, India's total gold imports in the current year can be estimated at 810 tonnes against 740 tonnes excluding replenishment of 50-60 tonnes, while domestic consumption can be estimated at 750 tonnes compared with 690 tonnes in the last full year.

In tonnage terms, India, the world's largest gold market, achieved an all-time record in both jewellery and retail investment.

Turkey stood second in both the categories, while Russia recorded its highest-ever level of jewellery demand.

Advancing ahead of Walker, Tom Pawlicki, energy and precious metals analyst at Man Financial (MF) Global, hinted that the probable Fed rate cut of 75 basis points in three equal installments till October 31 is likely to ease the liquidity problem for the gold market and therefore, the price can be seen between $700 and $730 an ounce early next year.

The  subprime factor which hampered the global liquidity would be eased by global agencies pumping funds. Crude oil prices, Tom estimated, to move down to $61-64 a barrel in the rest of 2007, but may rally back to $80 in 2008.

India is going to become a crucial market for gold price where seasonal demand can continue to contribute to firm prices. At the same time, the current price range of $650-660 is a good buying opportunity, he added.

Another factor helping short-term bullishness is seasonal demand in India.

The rupee strength against dollar would help sustain buying even when spot gold prices rise.