China to overtake India in overall gold demand

  • Chinas gold demand is expected to grow 1 percent this year to a record of around 860 tons, the global head of metals at consultancy Thomson Reuters GFMS said on Thursday, with both jeweler and investment sales rising. That increase means China will overtake India as the world’s biggest consumer of gold for the first time on a yearly basis, Philip Klapwijk told the online Reuters Global Gold Forum. China will overtake India ... both in overall demand terms and as the world’s largest jeweler market, he said. He said Chinas jeweler demand is expected to climb to around 520 tons from 515 tons in 2011, while investment is seen at around 270 tons, up from 265 tons last year. The balance, of around 70 tons, is industrial consumption, Klapwijk said. China is already the main consumer of a range of commodities, including copper, coal and iron ore. It is also the biggest gold producer, with mine output of 371 tons in 2011, but it is still having to import large quantities of gold to satisfy domestic demand. Klapwijk said gross imports of gold were likely to top 800 tons this year, with the majority channeled through Hong Kong. However, a substantial part of those will be round-tripped, a practice by which gold is transported to a certain location, then quickly re-exported. Over 40 percent of flows from Hong Kong in 2012 we estimate is for round tripping, he said. He said local trade sources suggested gold recycling -- a major source of supply to the gold market -- was likely to remain flat year-on-year. This is in spite of higher local prices, he said. It’s not that different to the picture elsewhere. (It) seems we need to ratchet up to another big figure - $2,000? - Before a really big shift up in scrap supply occurs. Spot gold prices are up nearly 10 percent this year to around $1,720 an ounce, but remain well off the record high at $1,920.30 an ounce they hit in September last year. The increasing demand of gold helps mining machinery industry, because portable crusher plant will be needed in extracting and separating gold from ores, which indicates oriental portable crusher plant will have larger market in the near future.