China gold jewellery demand surpasses India’s for first time in 2 yrs
Chinese demand for Gold jewellery surpassed that of India — the world’s largest consumer of bullion — for the first time since early 2009, reported the World Gold Council (WGC), an industry group, in its quarterly Gold Demand Trends.
Acording to WGC, Chinese gold jewellery demand in third quarter 2011 rose 13% to 131.0 tons while Indian demand declined 26% to 125.3 tons from 168.4 tons. As a result, China was the largest single market for jewellery demand, accounting for 28% of global jewellery demand. In value term this means an increase of 48% to RMB 46.0 bn.
Only four markets bucked the global trend to post a year-on-year increase in jewellery demand, led by China, Hong Kong, Japan and Russia.
The bulk of this increase in jewellery demand was generated by China’s third and fourth tier cities, where continued improvements in infrastructure have allowed retail chains to expand their network of stores and tap into the growing pool of demand among local consumers. This demand is being fuelled by rising income levels, a by-product of China’s rapid economic growth.
Demand was buoyant ahead of the National Day holiday on 1 October, which represents a buying occasion among Chinese consumers, aided by the price correction in September. Twenty four carat Gold jewellery was the main beneficiary of the increase in demand, with K-gold (18K) experiencing a modest decline in demand as the rising price level emphasized the investment benefits of pure gold.
Demand for gold jewellery among Chinese consumers will remain buoyant throughout the remainder of 2011, as the year-end holiday season approaches. However, recent price fluctuations may have stalled demand as consumers wait to see where the gold price stabilises. There are also indications that demand may begin to decelerate in 2012 as the market struggles to sustain its recent impressive growth rates, the report noted. – Commodity Online
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