July 20 (Bloomberg) -- Gold traders in India, the world’s biggest consumer, are stockpiling bullion to meet festival and wedding demand amid the highest price in more than six weeks, the World Gold Council said today.

Traders expect prices to stay buoyant before Diwali, the Festival of Light, and the wedding season, Ajay Mitra, managing director at the producer-funded group in India, said in an e- mailed statement today.

India’s gold purchases have slumped 54 percent in the six months ended June after a decline in the value of rupee pushed the cost of owning bullion, cooling demand from housewives and jewelers. Imports may fall further after the government doubled the import duty this month, the Bombay Bullion Association said.

“Short-term prices spikes can lead to some consumer hesitancy, but despite rises during the last week, Indian trade buyers have continued to invest in stock building,” Mitra said in the statement. “They view the price trend as one that will endure and are committed to preparing for the upcoming festive season as usual.”

The October-December period is the busiest season in India for jewelry sales, spurred by the wedding season and Diwali.

Gold for August delivery on the Multi Commodity Exchange of India Ltd. in Mumbai climbed as much as 0.8 percent to 14,878 rupees per 10 grams, the highest since June 5.

Immediate-delivery bullion gained as much as 1.7 percent to $953.80 an ounce, the highest since June 12.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net

Last Updated: July 20, 2009 06:48 EDT