China Gold Buying Beats India Again

GOLD BUYING by households in China has again seen it overtake India as the #1 gold consumer for 6 months running, says a new report from the industry's leading authority.

In the first 3 months of 2012, says a new report from market-development organization the World Gold Council, Chinese households Buying Gold amassed a new quarterly record of 255.2 tonnes – some 10% above the same period last year by weight – in the form of jewelry, ingots and other investment forms.

India's private demand totaled 207.6 tonnes – down by 29% from the same period in 2011.

Formerly #1 for Buying Gold, India has now been overtaken by China for two quarters in succession on the World Gold Council's data, which is prepared and supplied by the Thomson Reuters GFMS consultancy.

"Rising income levels and the Chinese New Year festivities helped to drive the growth," says the World Gold Council's new Gold Demand Trends, "which was concentrated in the 24-carat, pure gold jewelry segment, while demand for K-gold (18K) slipped."

The 36-page Gold Demand Trends is available free on the World Gold Council's website.

"Further growth is expected," says the World Gold Council's report. "Investors remain wary of high inflation rates, and property market restrictions continue to drive demand for god among investors seeking access to real assets."

China's gold jewelry demand is also benefiting from growth in disposable income, says the report, but in that sector "demand growth will remain more moderate as the market matures and economic growth decelerates."

Now the largest gold jewelry consumer worldwide for 3 quarters running, China in April this year halved the import duty rates on new shipments. That reduces the "competitive tax advantage of Hong Kong," says the report, "which sees considerable buying of gold by mainland Chinese tourists."

India, in contrast, has twice raised import duty on Gold Bullion flows, sparking a wave of protests from the domestic jewelry sector which succeeded in reversing a further tax-hike on jewelry at the point of retail.

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