The demand for gold in India, which is the biggest buyer of the shiny metal, has remained strong this festival season despite the high prices and inflationary pressures on the consumer.

The gold prices have already risen more than 20 per cent this year and are expected to rise further as market uncertainties are propelling investors towards safer investment options such as gold. The gold prices in India have risen by a substantial 29 per cent since the start of the year compared to 15 per cent last year.

The demand for gold in India is expected to peak during when the festivals of Dhanteras and Diwali at the end of October. Demand for gold bars, coins and other pure investment in the country have increased 83 percent in 2010 from the year earlier to 349 tonnes.

Sensing the positive trends, the jewelers have offered attractive discounts and schemes for customers to maintain the high demand this Dhanteras. The festival of wealth and prosperity, Dhanteras marks the beginning of Diwali festivities.

Jewelers say that during the last few days, the demand has spiked and the prevailing high priced as boosted sales. They say that the demand has been picking up since the past few days and will peak during Dhanteras.