Information released this week by the World Gold Council showed that demand for gold jewellery, gold bars and coins in India fell 42% to 173 tonnes during the last quarter of 2011. At the same time, demand in China grew to 190.6 tonnes during October-December 2011, marking the first time when India dropped to the second position in the gold consumption rankings.
The world demand for gold rose 0.4% to 4,0671 tonnes which is worth $205.5 billion. Central banks, in many developing countries have boosted gold sales as they sought to diversify their gold foreign coin reserves as has rising incomes in China which have resulted in a surge of purchases of gold and luxury items along.
Poor performances of China’s stock and property markets have meant that wealthy Chinese have invested in gold instead, as well as purchasing gold items in Hong Kong, where there are lower taxes than in mainland China.
The weakening rupee however has been stated to have significantly contirbutied the drop in sales of gold in India, as it made gold items much more expensive as well as battling with high inflation which meant that India purchased smaller amounds of gold, says Albert Cheng, a managing director at the World Gold Council, who released the data this Thursday.
Article by Lauren Probert