NEW DELHI: China has overtaken India as the world's largest gold consumer as buyers here shunned the yellow metal in the wake of spiralling prices.
Latest data released by the World Gold Council, the agency involved in market development, showed that demand for jewellery, and gold bars and coins fell 42% to 173 tonnes during the fourth quarter of 2011. At the same time, demand in China grew to 190.6 tonnes during October-December 2011, compared to 190.3 tonnes a year ago, marking the first time when India dropped to the second position in gold consumption rankings.
While India remained the top consumer for the full year, even that position may come under threat in 2012. Sales during the year fell 7% in India to 933 tonnes, led by a 14% fall in the jewellery segment. Purchase of bars and coins, however, grew by 5%. At 770 tonnes, China's consumption was 87% of India's. "This figure has only recently risen above the 50% mark, reflecting the strength of China's presence in the gold market," the WGC report released on Thursday said.
This year, the report warned, there were fewer auspicious dates in the Hindu calendar, which may impact sales in India. It also said the recent increase in import duty could hamper demand although consumers will be comforted by the recent government move mandating hallmarking of jewellery.
In 2011, a bulk of the annual decrease in demand was on account of the 33% fall witnessed in the second half (July-December) when prices kept going up to touch an all-time high of Rs 29,516 per 10 grams (on MCX) in mid-November. Although the price rise was the result of rising global rates, the depreciating rupee added to the pressure.
"The rapid rise and fall in the rupee, and resulting domestic gold price swings, had a strong impact on gold buying... as consumers traditionally prefer to wait until gold prices stabilize," WGC said. During times of uncertainty, gold prices rise as they are seen to be a safe bet.
The price rise coincided with the busy buying season from Diwali to the end of the wedding season in December, resulting in housewives staying wary of buying gold. The report said consumers preferred to go for lighter jewellery items, while several opted to hold back purchases.
While India's clout may have fallen a tad, it remains the most important market accounting for 27% of the global demand.
In 2011, a bulk of the annual decrease in demand was on account of the 33% fall witnessed in the second half (July-December) when prices kept going up to touch an all-time high of Rs 29,516 per 10 grams (on MCX) in mid-November. Although the price rise was the result of rising global rates, the depreciating rupee added to the pressure.
"The rapid rise and fall in the rupee, and resulting domestic gold price swings, had a strong impact on gold buying... as consumers traditionally prefer to wait until gold prices stabilize," WGC said. During times of uncertainty, gold prices rise as they are seen to be a safe bet.
The price rise coincided with the busy buying season from Diwali to the end of the wedding season in December, resulting in housewives staying wary of buying gold. The report said consumers preferred to go for lighter jewellery items, while several opted to hold back purchases.
While India's clout may have fallen a tad, it remains the most important market accounting for 27% of the global demand.
China overtakes India as largest gold consumer - The Times of India
Latest data released by the World Gold Council, the agency involved in market development, showed that demand for jewellery, and gold bars and coins fell 42% to 173 tonnes during the fourth quarter of 2011. At the same time, demand in China grew to 190.6 tonnes during October-December 2011, compared to 190.3 tonnes a year ago, marking the first time when India dropped to the second position in gold consumption rankings.
While India remained the top consumer for the full year, even that position may come under threat in 2012. Sales during the year fell 7% in India to 933 tonnes, led by a 14% fall in the jewellery segment. Purchase of bars and coins, however, grew by 5%. At 770 tonnes, China's consumption was 87% of India's. "This figure has only recently risen above the 50% mark, reflecting the strength of China's presence in the gold market," the WGC report released on Thursday said.
This year, the report warned, there were fewer auspicious dates in the Hindu calendar, which may impact sales in India. It also said the recent increase in import duty could hamper demand although consumers will be comforted by the recent government move mandating hallmarking of jewellery.
In 2011, a bulk of the annual decrease in demand was on account of the 33% fall witnessed in the second half (July-December) when prices kept going up to touch an all-time high of Rs 29,516 per 10 grams (on MCX) in mid-November. Although the price rise was the result of rising global rates, the depreciating rupee added to the pressure.
"The rapid rise and fall in the rupee, and resulting domestic gold price swings, had a strong impact on gold buying... as consumers traditionally prefer to wait until gold prices stabilize," WGC said. During times of uncertainty, gold prices rise as they are seen to be a safe bet.
The price rise coincided with the busy buying season from Diwali to the end of the wedding season in December, resulting in housewives staying wary of buying gold. The report said consumers preferred to go for lighter jewellery items, while several opted to hold back purchases.
While India's clout may have fallen a tad, it remains the most important market accounting for 27% of the global demand.
In 2011, a bulk of the annual decrease in demand was on account of the 33% fall witnessed in the second half (July-December) when prices kept going up to touch an all-time high of Rs 29,516 per 10 grams (on MCX) in mid-November. Although the price rise was the result of rising global rates, the depreciating rupee added to the pressure.
"The rapid rise and fall in the rupee, and resulting domestic gold price swings, had a strong impact on gold buying... as consumers traditionally prefer to wait until gold prices stabilize," WGC said. During times of uncertainty, gold prices rise as they are seen to be a safe bet.
The price rise coincided with the busy buying season from Diwali to the end of the wedding season in December, resulting in housewives staying wary of buying gold. The report said consumers preferred to go for lighter jewellery items, while several opted to hold back purchases.
While India's clout may have fallen a tad, it remains the most important market accounting for 27% of the global demand.
China overtakes India as largest gold consumer - The Times of India
