"Up to now, both jewelers and ETF's have been driving the rise in import demand. Now, maybe they can start to cancel each other out," Chakraborty said.
The funds have combined assets of about $1.8 billion, a small proportion of India's gold purchases, so progress might be slow.
"Gold is considered pure in our culture, and giving it is a virtue. Certain amount of gold must be bought," said 26-year-old Rohini, a Mumbai physiotherapist as she browsed in a jewelry shop.
Her mother, Jaishri, agreed. "Of course, nobody can afford as much as we used to. Once upon a time, we used to buy gold by the kilo," she said. "But the price is so high now, we just buy what we can for the necessary things."
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