India's gold consumption is likely to drop to its lowest in eight years in 2017, hit by government moves to make bullion trading more transparent and by faltering demand from some rural areas, the World Gold Council (WGC) said on Thursday. Evidence of weaker appetite in a country where gold is used in everything from investment to wedding gifts could drag on global prices that have been hovering near their highest in three weeks. India is the word's No.2 consumer of gold behind China.

Indian demand is likely to be around 650 tonnes in 2017, compared to a 10-year average of 845 tonnes, Somasundaram PR, Managing Director of WGC's India operations.

In the September quarter, the newly introduced Goods and Services Tax (GST) and anti-money laundering legislation around jewellery retail transactions deterred gold buyers.

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