Thursday, May 17, 2012

China Gold Demand Soars to Record High

Demand for gold in China jumped in the first quarter to hit a record high, as inflation concerns an constrictions in the Chinese real estate marketed weighed on the nation.

That went against the grain of other nations like India, where gold demand for jewelry plunged by 19 percent; although that was caused largely by the Indian government announcing they were going to raise duties on imported gold bullion and non-branded gold jewelry.

As for gold demand around the world, it dropped five percent in the first three months of 2012 to 1,097.6 tons, according to a report from the WGC.

That was largely the result of less demand in the jewelry and technology sectors, as gold prices soared 22 percent year-over-year.

Investment demand helped to overcome some of that, as did central banks increasing their gold inventories.

With overall gold demand in India plunging 29 percent, China continues to be the top consumer of gold for the last couple of quarters. Consumer demand for gold in the Middle Kingdom rose 10 percent to 255.2 tons in the second quarter. India's gold consumption came in at 207.6 tons.

As for ongoing gold demand in China, the said this: "Further growth is expected: investors remain wary of high inflation rates; and property market restrictions continue to drive demand for gold among investors seeking access to real assets."

Gold coins and bars led the way as far as percentages go, as demand climbed 13 percent for the year to 98.6 tons. Gold jewelry demand rose to 156.6 tons, a gain of 8 percent. China gold jewelry consumption now accounts for 30 percent of the global jewelry market.

The WGC said it expects gold jewelry demand in China to slow down some as market growth in China moderates and the overall economy matures.

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