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China 'to overtake India' as largest Gold Buying nation

China could surpass India as the world's largest consumer of gold this year, Reuters reports today (December 8th).

A new survey by leading precious metals consultancy GFMS predicts that Chinese gold demand will hit 432 tonnes for 2009, with India trailing behind on 422 tonnes.

However, Ajay Mitra, Indian subcontinent managing director at leading marketing organization the World Gold Council, is unconvinced that the trend will be sustained.

"India has been the world's largest gold consumer since time immemorial. In the Roman era, Indians bartered spices, cotton, jute for gold and precious stones," he told the news provider.

"China could be Buying Gold as they are not sure what the value of their currency would be against the dollar. But gold is not intrinsic to them as it is to Indians."

Meanwhile, anyone with a Gold Investment was provided with a boost last week following comments by Tom Kendall, an analyst at Mitsubishi Corporation.

He explained that the yellow metal should perform strongly in the coming months as the dollar - with which it shares an inverse relationship - will struggle to pare its losses.

"There is still uncertainty about whether there is the political will to tackle the deficit in the US and people are rightly bearish on the dollar on a medium-term view," he told the Wall Street Journal.

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