China "Clearly" Now World #1 for Gold Buying - 27 January 2013
CHINA has finally overtaken India as the world's largest end-market for Buying Gold according to analysis of the latest data, and is now "clearly" the world No.1
Despite India importing more gold than China did in 2012, "China is [also] the world's biggest miner of gold," writes Nic Brown at French investment bank and bullion dealer Natixis's office in London.
India has no domestic gold mining output. Its private demand for gold – the world's heaviest on official data since the early 1990s, and most likely the No.1 for centuries before that – has been blamed for the country's huge trade deficits of 2011 and 2012.
New Delhi again raised import duty on gold this month in a bid to stem consumer demand.
"Gold imports into India dropped by 19% year-on-year 2012 to just 991 tonnes," says Brown, "which was still around 20% higher than China's imports."
But by producing a further 400 tonnes from domestic gold mines, "[China] is now clearly the largest global consumer of gold."
Chinese dominance was first forecast in 2009 by both BullionVault and GFMS, the gold market's leading data consultancy. The first quarter of that year saw India become a net exporter of gold for the first time since the 1930s' Great Depression. But the last 3 months – including the Hindu festival and peak gold-buying season of Diwali – then surprised analysts with a surge in Indian demand.
Both 2010 and 2011 brought yet more forecasts of India slipping to second place behind China. But households in the sub-continent – where buying gold has strong cultural, religious and financial significance – proved more resilient to rising prices than Western market-watchers predicted.
China's position as world #1 for gold buying is likely to be recognized only after market-development organization the World Gold Council releases its full-year gold demand and supply data analysis in mid-February.