Global record high prices of gold as well as high domestic interest rates have affected imports of the yellow metal by the world's largest buyer, India, falling 9.11% in 2011 compared a year ago, the Bombay Bullion Association said on Monday.

Imports of the yellow metal in the last quarter of 2011 pulled down overall full-year import figures. In the fourth quarter, gold imports slid 56 per cent to only 125 tonnes, Prithviraj Kothari, president of the Bombay Bullion Association, was quoted as saying by the Economic Times India.

Year on year, India imported 878 tonnes of gold in 2011, compared from 958 tonnes in 2010.

Analysts and experts had hoped India's appetite for the yellow metal will further spike in the last three months of 2011, especially since it is during the last quarter, October to December, that the country holds its annual festival and wedding activities. During these months, Indians spend on gold jewellery and investments.

It is rare for gold demand in the last quarter to remain below third quarter consumption, Kothari said.

"People were even selling gold in November. For them it was an investment," he added.

"Imports were very bad in October to December, compared with last year, compared with Q3 of this year."

The World Gold Council (WGC) had earlier forecast India will buy more of the precious metal in November to bring total 2011 imports to over 1,000 tonnes. India only bought 281 tonnes of the safe haven precious metal in November 2010.

Kothari noted the dynamics that pulled down gold demand and imports in the fourth quarter of 2011 will be the very same influences to affect gold demand in the first quarter of 2012.

"Still prices are high. Interest rates are high. Liquidity is tight. I think imports in the first quarter of 2012 will be 50 per cent lower than last year," he said.

WGC data showed India imported 286 tonnes of gold in the first quarter of 2011.

Indian gold prices hit a $553.80 per 10 grams high on Nov. 15, while gold prices in the global front reached a high of of $1,920.3 per ounce in September.

The price of gold in India, in local currency terms, rose 32 per cent in 2011, while the rupee's value plummeted 16 per cent.

From January to September 2011, gold investment demand in India grew 22.5 per cent to 272.1 tonnes from a year ago, WGC data showed.

However, it was still insufficient to counter the drop in jewellery demand. Investment demand accounted for 22.6 per cent of total demand in 2010, according to WGC data.

"Jewellery sales were very low. Investment demand rose in 2011. People were interested in coins and bars. The share of investment demand in total demand has risen to 35 per cent in 2011," Kothari said.