"Customer preferences are changing," notes Hareelalbhai Zaveri, a Mumbai-based bullion dealer. "Earlier, customers would buy gold jewellery since they were considered the best investment option. Nowadays, customers are keen to buy gold biscuits [Gold Bullion], since they are easy to hoard. The customer is also assured of best value for money. Gold jewellery is no longer an investment option."That switch explains in part why gold imports have been rising overall with rising prices.
Of course, it can only be done once. Should the bulk of buying shift to bullion, then that option will be closed if gold prices rise even more. At that point, Indian buyers are going to be facing hard choices without any recourse except ponying up more and/or buying less.