China is likely to overtake India as the largest importer of gold this year on the back of huge demand for the precious metal for jewellery and investment in the world’s second-largest economy, World Gold Council (WGC) said today.
“In the first half, China’s demand for gold stood at 417 tonne surpassing India’s 383.2 tonne in the same period,” WGC Managing Director (India and Middle East) Ajay Mitra told reporters here.
Looking at the current trends, WGC expects China to overtake India as the largest importer of gold.
In the first quarter of 2012 (January-March), China’s gold import stood at around 136 tonnes, lower than India that imported 209 tonne in the same quarter.
“China is a much bigger economy than us and their demand, especially for jewellery and investment, is growing. The country’s own supply will not be able to meet this demand growth and the imports will rise,” he said.
The fastest-growing major economy in the world consumed roughly 761 tonne gold in 2011.
In the April-June quarter this year, China’s jewellery and investment demand declined 7 per cent to 144.9 tonne from 156.6 tonne in the corresponding quarter of 2011, due to lack of direction of gold prices and slowdown in domestic GDP growth.
However, steady growth in Chinese gold jewellery demand is expected to resume in the third quarter as economic growth is expected to pick up following monetary easing implemented during the second quarter.
China is the world’s largest gold producer and mines about 350 tonne of the precious metal annually.