India still the world's biggest gold market
India has shot to the top spot again as the world's biggest gold market in Q3, as demand jumped 9%, while demand in China toppled 8%.
Posted: Thursday , 15 Nov 2012
MUMBAI (MINEWEB) -
India has toppled China to emerge as the largest gold consumer in the third quarter of 2012. Though global gold demand fell in the Q3 with investors buying fewer bars and coins, India’s gold demand revived in the June-September quarter 2012.
According to data compiled by the World Gold Council (WGC), gold demand totalled 223.1 tonnes, up 9% year on year from 204.8 tonnes in the third quarter of 2011. Demand from China actually slipped in the same quarter. China recorded an 8% drop in demand at 177 tonnes (191 tonnes) due to the economic slow down in the country. Jewellery demand was down 5% at 124 tonnes as retailers reduced their inventory.
The WGC has said that India’s demand jumped as a result of the restocking of gold by jewellers before the festival of lights, Diwali, which is currently on in India. The gold demand trend report for June-September quarter of 2012 has noted that Indian consumers seem to have adjusted to the rise in gold price levels.
In the case of China, the report has said, the drop was ``particularly noticeable among the middle classes whose purchases of 18 carat gold jewellery were among the worst casualties.'' The report noted that there was also a slowdown in the number of new jewellery retail outlets which opened in China, all of which contributed to the slide.
Both India and China account for 55% of the global gold demand.
Commenting on the outlook for India’s demand, World Gold Council’s Managing Director, Marcus Grubb said, ``After a slow start to the first half of 2012, Q3 witnessed a gradual pick up in gold demand in India. Against the backdrop of a slowing economy and persistent inflation, this upward trend...is likely to continue through the end of 2012.''
Given the rising global prices of the precious metals, the Indian government increased the import tariff value of gold and silver marginally to $561 per 10 grams and $1,058 per kilo respectively. The tariff value is released every fortnight and is the base price on which the customs duty is determined to prevent under-invoicing.
During October, tariff value of gold in India stood at $556 per 10 grams and that of silver stood at $1,039 a kilo.