Source: Economic Times
MUMBAI: China may overtake India as the largest consumer of gold this year as demand for the precious metal in the neighbouring country in the first three months of 2012 has surged while the same has declined in India in the same period, the World Gold Council said today.
The demand for gold in China has touched a record high of 255.2 tonnes during the January-March period, whereas it fell by a sharp 29 per cent to 207.6 tonnes in India.
The demand slowed due to certain tax issues faced by the jewellery trade, increased import duty and the weakening rupee, the Council said.
Last year, the country imported 969 tonnes of gold, valued at a tad over USD 50 billion. The demand last year was 933.4 tonnes. It may fall to 800-900 tonnes this year.
In 2011, gold demand in China touched 769.8 tonnes, which is likely to hit 900-1,000 tonnes this year.
“As China locally produces 350-400 tonnes annually, India will still remain the largest importer of the yellow metal this year too,” WGC India MD Ajay Mitra told PTI.
China’s gold investment and jewellery demand reached 255.2 tonnes in the first quarter, up by 10 per cent over last year.
This growth was mainly due to the strong demand during the wedding season, Chinese new year and gifting for babies born in this auspicious year of the dragon, it said.
Demand for gold investment went up 13 per cent with a quarterly record of 98.6 tonnes in the first three months of this year, up from the year ago period, demonstrating continuing investor demand to preserve wealth amidst ongoing concerns over inflation and economic slowdown, the report said.
Jewellery demand in China also increased significantly to 156.6 tonnes, accounting for 30 per cent of the global jewellery demand, making the country the largest market for the third consecutive quarter.
Although the pace of growth in China is slowing, gold continues to benefit from rising income levels, increasing urbanisation, economic growth and the high inflationary environment, the WGC pointed out.