India stays above China in gold buys
China, which for the first time was expected to overtake India in gold demand in 2012, may have to wait for at least one more year as Indian consumers are back to buying gold despite high prices. Sachin Dave reports.business Updated: Nov 18, 2012 21:17 IST
China, which for the first time was expected to overtake India in gold demand in 2012, may have to wait for at least one more year as Indian consumers are back to buying gold despite high prices.
Analysts around the world predicted that China's gold demand is expected to be around 860 tonnes and would surpass India's in 2012. However, Indians are back to investing in gold, which industry trackers say is viewed as safe haven.
India's gold demand was lesser than that of China's in the first six months of 2012. However, in the third quarter, India's gold demand surpassed China's demand. Indians bought 607.6 tonnes of gold in the first nine months of 2012 as against a total demand of 576.9 tonnes in China, according to World Gold Council.
Analysts say Indian gold demand beat the global trend because of the macro economic scenario. "The demand for the yellow metal was strong in the third quarter of the calendar year because people preferred safe haven," said Hitesh Jain, commodity analyst, IIFL. "Also, the demand is expected to be the strongest in the fourth quarter due to the festive season followed by wedding season."
Indian gold demand may not be as high as in 2011 (in volume terms) but could be just enough to maintain lead over China.
"After a slow start in 2012, Q3 (July-September) witnessed a gradual pick up in gold demand in India...," said Marcus MD, investment, WGC. "Against the backdrop of a slowing economy and persistent inflation, this upward trend encouraged by socio-cultural affinity and gold's significance as an effective store of wealth is likely to continue through 2012 end."