China may overtake India as the world’s biggest gold buyer this year as demand for the precious metal is expected to rise both for jewellery as well as a safe-haven investment, according to the World Gold Council (WGC).
“It is likely that China will emerge as the largest gold market in the world for the first time in 2012,” said Marcus Grubb, Managing Director, Investment at the World Gold Council, in the WGC’s latest report.
There was a major boost to the overall gold demand from China, “which is a trend that we see continuing over the next year,” he said.
Gold demand in India, the world’s largest gold consumer and importer, witnessed a seven per cent fall to 933.4 tonne in 2011, while demand from China increased by 20 per cent to 769.8 tonne in the same period.
India and China together account for half of the world’s gold demand.
According to the WGC report, gold demand in China in 2011 grew for both jewellery and investment. “China jewellery demand increased every quarter of last year and was the largest single jewellery market worldwide for the second half of 2011,” it said.
In India, where gold is widely purchased during festivals and weddings, the demand in 2011 declined slightly to 933.4 tonne against 1,006.3 tonne in the previous calendar year, due to drop in jewellery demand following volatile prices and weak rupee.
Jewellery demand in the country dipped to 567.4 tonne in 2011 from 657.4 tonne in the previous year, though demand for gold coins and bars rose to 366 tonne from 348.9 tonne in the reviewed period, the report said.
However, the global demand for gold is expected to remain strong in 2012, the WGC said.
Last year, global gold demand rose marginally to 4,067.1 tonne worth an estimated $ 205.5 billion - the first time that global demand has exceeded $200 billion and the highest tonnage level since 1997, it said.
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